investingLive Americas FX news wrap 5 Dec

The USD is closing mixed on the day with the USD moving the most vs the CAD after stronger Canada GDP data. The USDCAD fell by -0.93% and closed below its 100 and 200 day MAs above and below the 1.3900 level (see technical post here).

The USD was also lower vs the AUD (by -0.44%). For that currency pair, it rose around 1.4% this week - the biggest mover for the week (see post here).

The other changes vs the major currencies were more modest on the day:

EUR: Unchanged
GBP -0.01%
CHF +0.11%
NZD -0.23%

As mentioned, Canada delivered a much stronger-than-expected November jobs report, posting a 53.6K employment gain versus a -5.0K decline expected, following +66.6K in October. The unemployment rate dropped to 6.5%, well below the 7.0% forecast, though partly helped by a dip in the participation rate to 65.1% from 65.3%. The composition was mixed: full-time employment fell by 9.4K, while part-time jobs surged by 63.0K, down from the prior month’s 85.1K. Wage growth for permanent employees held steady at 4.0% year-over-year. After months of conflicting signals — weak data in July/August followed by strong prints in September/October — this report delivers a decisive upside surprise, pushing joblessness sharply lower and contradicting expectations of labor-market cooling. With the Bank of Canada already signaling a pause, today’s data raises the possibility of renewed tightening discussions and may prove a game-changer for the Canadian dollar. The move below the 100/200 day moving averages increased the bearish bias.

In the US, the U.S. personal income rose 0.4% in September, beating expectations of 0.3%, while personal consumption increased 0.3%, matching forecasts. Headline PCE inflation rose 0.3%, keeping the year-over-year rate at 2.8%, its highest level in a year. Core PCE, the Fed’s preferred inflation gauge, increased 0.2% on the month, with the YoY rate holding at 2.8%, slightly below the 2.9% expected. Excluding food, energy, and housing, PCE rose 0.2%, unchanged from last month. Overall spending climbed by $65.1 billion, driven overwhelmingly by a $63.0B increase in services and $2.1B in goods, showing that consumer demand remains steady even as inflation edges higher.

The preliminary December University of Michigan Consumer Sentiment Index rose to 53.3, beating expectations of 52.0 and improving sharply from 50.3 previously. The current conditions component softened slightly to 51.0 (vs. 51.3 expected and 52.3 prior), while expectations jumped to 52.1 (vs. 51.2 expected and 49.0 prior), signaling improving forward-looking sentiment. Inflation expectations eased meaningfully: one-year inflation fell to 4.1% from 4.7%, and five-year inflation slipped to 3.2% from 3.6%. While the UMich survey has known limitations, the Fed still monitors it closely, and the drop in inflation expectations represents a clear green light for potential rate cuts—a development equity markets typically welcome.

Looking at the US stock market, the major indices moved mostly higher to end the week:

Dow industrial average +0.22%
S&P index +0.19%
NASDAQ index +0.31%

For the trading week:

Dow industrial average but 0.50%
S&P index +0.19%
NASDAQ index +0.91%

In the US debt market, yields were higher

2-year yield 3.562%, +3.4 basis points
5 year yield 3.714%, +3.2 basis points
10 year yield 4.139%, +3.1 basis points
30 year yield 4.794%, +3.1 basis points

Looking at other markets:

Crude oil rose $0.47 or 0.79% t $60.14
Gold fell $10.46 or -0.25% to $4197.45
Silver rose $1.19 for 2.10% to $58.29
Bitcoin reversed back to the downside today with a decline of $-3084 to $89,022.

investingLive Americas FX news wrap 5 Dec

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