Buying Momentum Falters
Asian markets pushed higher overnight, with the exception of the Shanghai Index, which was nursing losses following dismal Chinese industrial profits. Europe also started in the black, although European bourses were back in the red by midway through the European session.
The price action so far today is emblematic of a textbook “risk off” day: stocks are falling across the globe, oil is trading off by nearly 3%, bond yields are generally retreating, and the yen is the strongest performing major currency (though we would note that gold bugs still can’t seem to catch a break!).
USD/CAD fell sharply for a second day in a row on Thursday as a combination of factors helped to weigh on the US dollar while boosting the Canadian dollar. This USD/CAD drop has occurred immediately ahead of key Canadian jobs data for April to be released on Friday.
Most aspects of the US jobs data released on Friday morning disappointed expectations, but were unlikely disappointing enough to sway the Federal Reserve from its firm track towards higher interest rates through 2018 and beyond.
Monthly employment data will take center stage on Friday morning as the US Department of Labor will report on the number of jobs added to the US economy in April, the unemployment rate, and key wage growth figures.