Labor Market Stats and Service Sector PMIs Put the USD in Focus

With stats on the lighter side early on, the focus will be on labor market stats and service sector PMI numbers out of the U.S
Bob Mason
NonFarm Payrolls

Earlier in the Day:

It was a quiet day on the data front through the Asian session this morning. March building approvals were released early on in the day.

While the stats were on the lighter side, China returned from a 2-day holiday, with risk sentiment through the early part of the day being driven by better than expected stats out of the U.S on Thursday.

For the Aussie Dollar,

Building approvals tumbled by 15.5% in March, which was worse than a forecasted 14% decline. Approvals had surged by 19.1% in February.

According to the ABS,

  • The slide was attributed to a 27.4% fall in New South Wales and a 27% fall in Victoria.
  • Private dwellings excl. houses, slid by 30.6%, weighing most heavily on the headline figure.
  • Private house approvals fell by just 3.2% in March.

The Aussie Dollar moved from $0.0.69937 to $0.0.69875 upon release of the figures. At the time of writing, the Aussie Dollar was down 0.06% to $0.6996.

Elsewhere,

At the time of writing, the Japanese Yen was up 0.03% to ¥111.48 against the U.S Dollar. With no stats out of New Zealand to rock the boat, the Kiwi Dollar was up 0.05% to $0.6621.

The moves across the major pairings came in spite of a mixed session in the Asian equity markets. While the markets in Japan and China remained closed, the ASX200 was on the move following Thursday’s 0.59% fall. At the time of writing, the ASX200 was up by 0.22%.

The Hang Seng was under pressure in the early hours, down by 0.3%. Tech stocks struggled, with Sunny Optical Tech and Tencent Holdings, down by 1.35% and 0.77% respectively. Oil stocks also saw red, with CNOOC Ltd seeing the heaviest loss of the day, down by 2.01% at the time of writing.

The Day Ahead:

For the EUR,

It’s a relatively quiet day ahead on the economic calendar. Prelim April inflation figures for the Eurozone will provide direction early on.

A pickup in inflationary pressure will provide some support for the EUR in the early part of the day, if in line with or better than forecasted.

From elsewhere, key stats out of the U.S will have a material impact on risk sentiment and the pairing later in the day. Labor market and non-manufacturing PMI numbers will need to be considered.

At the time of writing, the EUR was up 0.0.2% at $1.1174.

For the Pound,

It’s a relatively quiet day ahead on the economic calendar. In the wake of the BoE’s hawkish chatter, the focus will shift to April’s service sector PMI due out later today.

Forecasts are for a return to expansion in the sector, with the PMI forecasted to rise from 48.90 to 50.50 in April.

On the political arena, local elections results will be rolling out through the day. While less influential than the general election, the chances of a vote of no confidence could rise should the Tories have a disaster.

At the time of writing, the Pound was up 0.05% to $1.3059.

Across the Pond,

It’s a big day ahead on the economic calendar. Key stats due out of the U.S include nonfarm payroll and wage growth figures and the market’s preferred ISM non-manufacturing PMI.

Trade data and the less influential Markit service sector PMI will also need to be considered.

Outside of the numbers, FOMC members Clarida and Williams will speak during the U.S session. Expect some market sensitivity to any monetary policy chatter following Wednesday’s fence-sitting.

At the time of writing, the Dollar Spot Index was down 0.01% to 97.819.

For the Loonie,

There are no material stats due out of Canada.

Crude oil prices and risk appetite will likely provide direction later in the day.

The Loonie was up 0.07% at C$1.3466, against the U.S Dollar, at the time of writing.

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