Dollar remains steady in early US session after stronger than expected Non-farm payroll report. Job market in US expanded by 290k in April, much stronger than expectation of 180k. Prior month's figure was also revised up from 162k to 230k. However, unemployment rate unexpectedly climbed from 9.7% to 9.9%. Markets reaction is so far muted as the greenback is staying in range against major currencies.
Canadian dollar stages a strong rebound today has data showed record job growth in April. Employment market expected by an impressive 108.7k, stronger rise in record dating back to 1976. Unemployment rate also fell from 8.2% to 8.1%. This is way above market's expectation of 25k increase and 8.2% unemployment rate. The data adds to speculation that BoC will raise interest range in next meeting on June 1.
G7 group will hold a conference call today to discuss the Greek debt situation. But the G7 finance ministers are not expected to engage to specific action. German lower house of parliament approved the country's share of the EUR 110b Greek rescue package by 390-73 votes, with 139 abstentions. The upper house of parliament also approved the bill later in the day. Germany is expected to grant as much as EUR 22.4b in credit to Greece over three years.
Sterling spikes lower against Euro today as UK will have a hung government with no majority out of today's election. Investors are worried that hung parliament will make it harder for a new government to come up with swift measures to reduce Britain's budget deficit. Also this will raise the prospect of another election sooner rather than later and so whichever parties form the government have less incentive to push through radical measures on the public finances.
USD/CAD Mid-Day Outlook
Daily Pivots: (S1) 1.0287; (P) 1.0513; (R1) 1.0745; More.
USDCAD's sharp pull back from 1.0734 extends further to as low as 1.0496 so far and more decline might still be still. Nevertheless, we'd still expect downside to be contained above 1.0280 support and bring another rise. ABove 1.0571 minor resistance will flip intraday intraday bias back to the upside and break of 1.0734 will target 1.0779 key resistance next. Though, note that decisive break of 1.0280 will indicate that rise from 0.9929 is completed and will turn focus back to this low.
In the bigger picture, the strong break of medium term falling trend line resistance serves as the first alert that USD/CAD has made a medium term bottom at 0.9929, on bullish convergence condition in daily MACD. Decisive break of 1.0779 resistance, which will also have sustained trading above 55 weeks EMA (now at 1.0687) will confirm this case and turn outlook bullish. In such case, stronger rally should be seen towards 61.8% retracement of 1.3063 to 0.9929 at 1.1866.
Economic Indicators Update
GMT Ccy Events Actual Consensus Previous Revised 23:50 JPY Monetary Base Y/Y Apr 2.90% 2.40% 2.10% 01:30 AUD RBA Quarterly Monetary Policy Statement 05:45 CHF Unemployment Rate Apr 4.00% 4.10% 4.10% 07:15 CHF Retail Sales (Real) Y/Y Mar 4.50% 2.90% 3.10% 2.70% 08:30 GBP PPI Input M/M Apr 0.60% 1.00% 3.60% 3.80% 08:30 GBP PPI Input Y/Y Apr 13.10% 13.10% 10.10% 10.30% 08:30 GBP PPI Output M/M Apr 1.40% 0.50% 0.90% 08:30 GBP PPI Output Y/Y Apr 5.70% 4.80% 5.00% 08:30 GBP PPI Output Core Y/Y Apr 4.40% 3.50% 3.60% 3.70% 10:00 EUR German Industrial Production M/M Mar 4.00% 1.50% 0.00% -0.20% 11:00 CAD Net Change in Employment Apr 108.7K 24.3K 17.9K 11:00 CAD Unemployment Rate Apr 8.10% 8.20% 8.20% 12:30 USD Change in Non-Farm Payrolls Apr 290K 180K 162K 230K 12:30 USD Unemployment Rate Apr 9.90% 9.70% 9.70%