Forex news for North American trading on October 5, 2018:
- September non-farm payrolls +134K vs +185K expected
- Canada September employment 63.3K vs 25K estimate
- Canada August merchandise trade balance +$0.53 billion vs -$0.50 billion expected
- US August trade balance -$53.2 billion vs -$53.6 billion expected
- Fed's Kaplan: China trade talks 'a different kettle of fish' compared to NAFTA
- Baker Hughes US oil rig count 861 vs 863 prior
- Fed's Bostic: I may have underestimated economic strength
- NY Fed's Nowcast estimate lowered to 2.27% from 2.47% last week
- Brexit: EU said to offer UK 'super charged' UK free trade deal
- Fed's Williams: We're not seeing inflation pressures
- Kudlow: Unemployment can still go lower
Markets:
- WTI crude oil up 1-cents to $74.36
- Gold up $4 to $1204
- US 10-year yields up 4.3 bps to 3.23%
- S&P 500 down 16 points to 2885
- GBP leads, NZD lags
The anticipation on Friday was that it would be all about non-farm payrolls and the Canadian jobs report but markets weren't cooperative. The US report was soft on the headlines but that was balanced by upward revisions. Wages were a tad soft but the unemployment rate fell.
At first the US dollar jumped 20 pips, then it gave back the moves and started on a long decline. One again bonds and stocks were bigger movers with yields continuing to push higher and China fears also hitting equities.
In the UK, a report saying the EU is about to offer a trade deal was positive and that added to momentum the pound already had. Cable finished up 90 pips and will close out the week higher after a poor start.
The commodity currencies remain deeply unloved. AUD/USD broke to fresh lows since 2016 and will close near the lows at 0.7050. NZD/USD dropped another 37 pipis to 0.6442.
Despite the NAFTA deal, USD/CAD will finish the week slightly higher at 1.2945 as risk aversion, flows and trade fears intensify.
The euro finished flat and is showing some resilience as Italy remains a headwind.
