US April Jobs Report in Focus

US Nonfarms and wage growth will be the day's key figures but are unlikely to change Fed rate hike expectations.

Previous Day's Market Highlights

Sterling traded at familiar levels yesterday, above 1.13 against the euro and within the 1.35-1.36 band against the dollarEuro-dollar held below 1.20 after breaking to a new low since January heading into yesterday’s session. Elsewhere, sterling fell below 1.80 against the Aussie overnight for the first time since mid-March and is trading at its lowest levels against the Canadian dollar since mid-February.
 
The highlight of the data calendar was an unexpected slowdown in Eurozone CPI, which found April headline inflation down to 1.2% from 1.3% in March and core inflation down to 0.7% from 1.0%. This add complexity to the policy normalisation timing debate.  

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1328 1.1600 1.1312 2.48%
GBP/USD 1.3560 1.4376 1.3537 5.84%
EUR/USD 1.1966 1.2414 1.1938 3.83%
GBP/AUD 1.8014 1.8478 1.7966 3.83%
GBP/NZD 1.9327 1.9755 1.9171 2.96%
GBP/CAD 1.7446 1.8095 1.7424 3.71%

Today's Market Highlights

Attention today is primarily on this afternoon’s April jobs report from the US (13:30 BST). While the Nonfarm Payrolls figure is usually a market mover, the wage data has received increasing market attention in recent months as the Fed looks for signs up a pick-up in wage pressures. Today’s report could be mixed, with NonFarms forecast to pick up from last month’s softer-than-expected figure but wage growth to hold steady compared to a year prior and slow from the previous month.
 
However, barring a significantly disappointing release, today’s data are unlikely to change market expectations of a rate hike next month. And should the data surprise to the upside, this could increase speculation that the Fed may need to raise rates more quickly than previously expected. Therefore, the release may provide limited dollar direction unless there are any surprises.
 
There are several Fed speakers on the calendar but largely after the European close. Note that Monday is a Bank Holiday, so the Daily Report will return on Tuesday. It’s a fairly quiet calendar on Monday, but any headlines could prompt exacerbated movement. The main event next week is Thursday’s Bank of England meeting. Market expectations fell from 90% to 20% last month after a spate of softer data, cautious comments from Governor Carney, and the slowest quarterly GDP print since Q4 2012.

Today's Economic Calendar

Time Currency Release Consensus Previous
13:30 USD Nonfarm Payrolls (Apr) 192K 103K
13:30 USD Average Hourly Earnings MoM (Apr) 0.2% 0.3%
13:30 USD Average Hourly Earnings YoY (Apr) 2.7% 2.7%
14:00 EUR German Buba President Weidmann Speaks
15:00 CAD Ivey Purchasing Managers Index s.a. (Apr) 60.2 59.8
17:00 USD Fed's Dudley Speaks
20:00 USD Fed's Williams Speaks
22:30 USD Fed's Quarles Speaks
01:00 USD Fed's Kaplan Speaks
01:00 USD Fed's Bostic Speaks
01:00 USD Fed's George Speaks
15:00 USD ISM Non-Manufacturing PMI (Apr) 58.1 58.8
15:00 USD Factory Orders MoM (Mar) 1.4% 1.2%
02:30 AUD RBA Monetary Policy Statement

Caxton