XE Market Analysis: Europe - May 11, 2021
The dollar has gained for a second day, which has been a rare feat over the last five weeks. This has come amid wider recognition that the disappointing headline readings of the April U.S. jobs report was down to temporary, supply-side issues although sufficient to maintain the Fed s prevailing commitment to ZIRP and with market participants turning attention to tomorrow s U.S. inflation data. Fed speakers yesterday talked up prospects for the labour market while mostly still maintaining dovish signalling. Chicago Fed President Charles Evans, who is an arch dove, argued that the central bank will still need to remain accommodative until we really get nervous that inflation is just in excess of averaging 2% over time. At the same time, the surge in commodity prices, which has lifted many broad commodity indices to five-year-plus highs, suggests that inflation risks are running above what can ben accounted for by the prevailing y/y base
XE Market Analysis: Europe - May 10, 2021
The dollar has managed to find a toehold after plunging on Friday on the massive U.S. jobs report disappointment. Economists were blindsided by the data, focused too much on burgeoning demand while taking their eye off the gaping pandemic-era supply side anomaly in the labour market: that is, the difficulty businesses are having in recruiting workers, with millions who normally work in low paid service sector jobs finding their incomes are better on unemployment benefits than working in their previous jobs. By way of illustration of prevailing realities, one McDonald s restaurant in Florida has been offering $50 for anyone who just turns up for an interview. Child care has reportedly been particularly hard to come by, too, contributing to the curtailment in labour supply. Other factors at play include labour market skills have in some areas degenerated as a consequence of prolonged absence from work. The fact is, the pandemic emergency benef
XE Market Analysis: North America - May 10, 2021
The dollar has managed to find a toehold after plunging on Friday on the massive U.S. jobs report disappointment. Economists were blindsided by the data, focused too much on burgeoning demand while taking their eye off the gaping pandemic-era supply side anomaly in the labour market: that is, the difficulty businesses are having in recruiting workers, with millions who normally work in low paid service sector jobs finding their incomes are better on unemployment benefits than working in their previous jobs. By way of illustration of prevailing realities, one McDonald s restaurant in Florida has been offering $50 for anyone who just turns up for an interview. Child care has reportedly been particularly hard to come by, too, contributing to the curtailment in labour supply. Other factors at play include labour market skills have in some areas degenerated as a consequence of prolonged absence from work. The fact is, the pandemic emergenc
XE Market Analysis: Europe - May 07, 2021
The dollar has found a footing after declining yesterday, which was the latest contribution to what has been several days of up-then-down price action. The 10-year U.S. Treasury yield has continued to bump along under 1.60%, while the Dow Industrials index scaled to another record closing high following a solid jobless claims report and forecast-beating productivity data out of the U.S., alongside more encouraging corporate earnings reports. Focus now falls on today s U.S. Arpil payrolls report. We are slightly below the consensus in forecasting a headline rise of 850k after the 916k increase in March. Hourly earnings are seen rising 0.2% versus -0.1% previously, and the unemployment rate should dip to 5.7% from 6.0%, the lowest since March of 2020. Although a little under the median, our projections are still consistent with a stellar 9.0% GDP growth rate in Q2. The risk for the jobs report data is skewed to the upside. Goldman Sachs, for i
XE Market Analysis: North America - May 07, 2021
The dollar has been on a back foot today after a several-day period of up-then-down price action. The 10-year Treasury yield has nudged 1 bp higher, back above 1.580%, which is near the midway point of the range that has been seen over the last couple of weeks. The U.S. jobs report looms. A strong 890k headline increase is backed in. We are slightly below the consensus in forecasting a headline rise of 850k. Hourly earnings are seen rising 0.2% versus -0.1% previously, and the unemployment rate should dip to 5.7% from 6.0%, the lowest since March of 2020. Although a little under the median, our projections are still consistent with a stellar 9.0% GDP growth rate in Q2. The risk for the jobs data appears skewed to the upside. Goldman Sachs, for instance, is looking for a blowout 1,300k headline rise and a plunge in the jobless rate to 5.5%. President Biden will also be making a speech to specifically addressing the labour market re