- US June non-farm payrolls +209K vs +225K expected
- Canada June employment change 59.9K vs 20.0K expected
- Fed's Goolsbee: I feel like we're on the golden path to 'no recession and low inflation
- Air travel rebounds: Passengers at 69.1% of pre-pandemic levels
- EIA weekly US natural gas inventories 72 bcf vs 64 bcf expected
- Canada June Ivey PMI 53.4 vs 53.5 prior
- Timiraos: June jobs report keeps the Fed on track for July hike
Markets:
- Gold up $13 to $1924
- WTI crude oil up $1.86 to $73.66
- US 10-year yields up 2.3 bps to 4.06%
- S&P 500 down 0.2%
- JPY leads, USD lags
The initial reaction to the non-farm payrolls report was mixed as the softer headline competed with higher-than-anticipated wage growth. The dollar fell, then recovered most of the losses.
From there, the bond market took over. Yields began to fell and 2s fell back through 5%, kicking off a strong decline in the US dollar. The USD/JPY selling today was particularly notable and certainly raised some eyebrows regarding whatever the MOF or BOJ is going to deliver, but it could also be profit taking.
The pound and euro were also particularly perky as bot added around 90 pips from early New York levels. Cable tried the June high and matched it to the pip but couldn't get through and gave a handful of pips back late.
The commodity currencies doubly benefited from stronger commodity prices and better risk appetite, putting up some strong gains. The loonie trailed its mates despite another strong jobs headline. One of the reasons might be the softer wage growth in the employment report. Next week's Bank of Canada decision is going to be a big one with the implied probability of a hike at 67%.
Have a great weekend.
