The JPY is the strongest and the NZD is the weakest as the NA session begins

As the North American session begins, the JPY is the strongest and the NZD is the weakest of the major currencies the USD is in the middle little changed with gains vs the CHF, CAD, AUD and NZD and declines vs the EUR, GBP, and JPY. However, take note that before the key US jobs data today, the major currencies are all scrunched together with relatively modest changes.

Both the US and the Canada jobs report now take center stage. What is expected for May in the US?

• Non-farm payroll estimate 185K (vs 175 theK)
• Private payroll, 170K vs 167K last month.
• Manufacturing payrolls, 5K vs 8K last month
• Unemployment rate 3.9% est vs 3.9% last month
• Average earnings MoM 0.3% versus 0.2% last month
• Average earnings YoY 3.9% versus 3.9% last month
• Average workweek (hrs) 34.3 versus 3.4% last month
• labor force participation rate:No estimate versus 62.7% last month
• U6 underemployment: No estimate versus 7.4% last month.

In Canada,

• Employment change 22.5K expected vs 90.4 last month
• Unemployment rate 6.2% vs 6.1% last month
• Part time employment last month 50.3K
• Full time employment last month 40.1
• Participation Rate 65.4 last month
• Average hourly earnings last month 4.8%.

Looking at some of the employment data released so far:

• ADP employment change 152K vs 173K estimate. Prior month was revised to 188K vs 192K. LOWER
• ISM Manufacturing PMI 51.1 vs 48.6 last month. HIGHER and above 50.0 (expanding)
• ISM Non- Manufacturing employment 47.2 vs 45.9 in April. HIGHER but below 50.0 (contracting)
• JOLTs job openings: 8.06M vs 8.37M estimate. LOWER and lowest level since February 2024.
• Challenger layoffs 63.816K vs 64.789K last month. Little changed, but lower than the 2024 high at 90.39K
• 4 week MA of initial jobless claims 222.25K. Highest levels since September 2023. The highest since the fall post Pandemic reached 253K. The low was at 197K.

Much will hinge on the data. IN the US, below 125K and bad may switch to being bad news as focus shifts to slower growth in the economy. Above 225K and concerns about inflation may resurface with yields moving back higher after the 35 basis point decline over the last 7-8 trading days.

IN Canada, the Bank of Canada cut rates this week. They are on a wait and see the data now, but normally it takes it’s clues from the move in the USD when both are released on the same day.

A snapshot of the other markets as the North American session begins shows

• Crude oil is trading up $0.48 at $76.02. At this time yesterday, the price was at $74.70
• Gold is trading down -$39.27 or -1.69% at $2335.57. At this time yesterday, the price was at $30.30
• Silver is trading -$0.93 or -3.07% at $30.33
• Bitcoin currently trades at$71,790. At this time yesterday, the price was trading at $71,147
• Ethereum is trading at $3830.. At this time yesterday, the price trading at $3847.10

In the premarket, the snapshot of the major indices are marginally higher.

• Dow Industrial Average futures are implying a gain of 7.8 points. Yesterday, Dow Industrial Average rose 78.84 points or 0.20% at 38886.18
• S&P futures are implying a gain of 4.01 points. Yesterday, the S&P index fell -1.09 points or -0.02% at 5352.95
• Nasdaq futures are implying a gain of 33.56 points. Yesterday, NASDAQ index fell -14.78 points or -0.09% at 17173.12

European stock indices are trading lower today in the US morning snapshot:

• German DAX, -0.83%
• France CAC -0.82%
• UK FTSE 100, -0.53%
• Spain’s Ibex, -0.40%
• Italy’s FTSE MIB, -0.73% (delayed 10 minutes).

Shares in the Asian Pacific markets were mostly lower:

• Japan’s Nikkei 225, -0.05%
• China’s Shanghai Composite Index, was 0.08%
• Hong Kong’s Hang Seng index, -0.59%
• Australia S&P/ASX index, +0.49%

Looking at the US debt market, yields are trading higher after closing lower yesterday for the fifth consecutive day:

• 2-year yield 4.746%, +2.6 basis points. At this time yesterday, the yield was at 4.744%
• 5-year yield 4.314%, +2.3 basis points. At this time yesterday, the yield was at 4.322%
• 10-year yield 4.298%, +1.8 basis points at this time yesterday, the yield was at 4.308%
• 30-year yield 4.444%, +1.5 basis points. At this time yesterday, the yield was at 4.460%

Looking at the treasury yield curve the spreads are moving modestly higher:

• The 2-10 year spread is at – 44.5 basis points. At this time yesterday, the spread was at -43.7 basis points.
• The 2-30 year spread is at -30.0 basis points. At this time yesterday, the spread was at -28.5 basis points.

This article was written by Greg Michalowski at www.forexlive.com.