- Canadian jobs report will be overshadowed by US NFP
- Oil prices ease despite latest Trump threat.
- US dollar opened with small losses after quiet overnight session.
USDCAD open: 1.3868, overnight range 1.3868-1.3912, close 1.3910, WTI 92.83, Gold 4,462.32
The Canadian dollar is trading sideways but firmer ahead of the Canadian and US employment reports.
Today's Canadian Labour Force Survey (forecast 10,000, previous -17,000) will take a back seat (as usual) to the US NFP numbers. Furthermore, last Friday's GDP data showing the country was in a technical recession (two quarters of negative growth) limits the BoC's options to deal with inflation and certainly makes it very difficult to justify a rate hike.
WTI oil traded sideways in a 91.63-93.52 range, supported by Trump's threat to bomb Iran while hopes for another delay limit gains.
Middle East risks intensified on two fronts. Hezbollah dismissed an Israeli ceasefire proposal as meaningless, while Israel broadened its military campaign in Lebanon. Trump threatened new military action against Iran if there is not a deal by the end of the week.
US nonfarm payrolls rounds out the week on the data front, with the consensus pointing to an 85,000 job gain and the unemployment rate holding at 4.3%. Markets are unlikely to move much on the number either way, as it carries little weight for the June 17 FOMC decision.
None of that deterred European equity buyers. FX markets were more cautious, with dollar longs pared ahead of the NFP release and 10-year Treasury yields easing back from Thursday's highs.
Asian markets wrapped up a choppy week on a soft note. The Hang Seng shed 1.15%, the Topix was little changed, and the ASX 200 slipped 0.70%.
As of 7:00 am, European bourses are in positive territory, with the DAX up 0.24%, the CAC 40 ahead 0.58%, and the FTSE 100 adding 0.38%. S&P 500 futures are off 0.42%. The 10-year Treasury yield sits at 4.467%, DXY is at 99.20, and gold (XAUUSD) is at 4,446.05.
EURUSD sank in a 1.1610-1.1645 range ahead of the US jobs report. A disappointing Eurozone Q1 GDP print, coming in at -0.2% q/q against a 0.1% forecast, put the bloc within reach of a technical recession.
GBPUSD rose in a 1.3416-1.3470 range, supported by EURGBP weakness following the soft Eurozone GDP figures. UK house prices fell 0.1% m/m in May, matching April's decline and coming in below expectations.
USDJPY consolidated in a 159.89-160.03 range, hovering near levels that have historically drawn BoJ intervention. The pair retains an underlying bid, with market participants drawing some encouragement from Prime Minister Sanae Takaichi's comments that sounded ambivalent towards yen depreciation.
AUDUSD drifted between 0.7106 and 0.7142, with any upside capped by residual disappointment over this week's weak domestic GDP figures, which complicate the RBA's ability to sustain a hawkish policy stance.
