- US factory orders for March 1.6% versus 1.6% expected
- BOCs Macklem: There is a limit to how far US/Canada rates can diverge
- More from Bank of Canada's Macklem:Rates unlikely to go back down to pre-Covid levels
- US initial jobless claims 208K versus 212K estimate
- US Q1 unit labor costs +4.7% vs +3.3% expected
- Bill Gross: Look for 10-year yields to rise above 5% over the next 12 months
- Canada March trade balance -$2.28 billion vs +$1.50 billion expected
- US trade balance for March -$69.4 billion versus -$69.1 billion estimate
- Atlanta Fed GDPNow estimate for Q2 growth remains unchanged at 3.2% (or is it 3.3%)
- Preview: April non-farm payrolls by the numbers -- the highest consensus since 2022
Markets:
- Gold down $15 to $2303
- US 10-year yields down 1 bps to 4.58%
- WTI crude oil up 1 cents to $79.01
- S&P 500 up 0.9%
- JPY leads, USD lags
Eyes have been on USD/JPY since the intervention at this time yesterday and it's certainly been lively. After the 400 pip intervention drop, buyers in Asia quickly picked up the pieces and bid the pair to 156 from 153.00. However the tide turned soon after and selling accelerated in US trade as the pair slowly drifted all the way back to 153.00.
What was driving the selling wasn't entirely clear but there may be hesitancy to buy the dip ahead of non-farm payrolls or further potential intervention. Moreover, the dollar was broadly weaker on the day as the market priced in 39 bps of Fed cuts this year compared to 30 before the statement. Treasury yields edged lower and stocks rose, weighing on the dollar broadly.
AUD/USD was particularly strong as Chinese equities soared in their best day in six months. The Aussie is trading near the best levels of the week after a rough outing on Tuesday was slowly erased. Further, talk of rate hikes in Australia continues to do the rounds as spending remains high and housing stubborn.
The euro and pound both bottomed early in US trading and then made a steady recovery to erase all the declines and finish the day slightly higher. The euro has been particularly resilient in the latest round of dollar bids, suggesting that a June ECB cut is fully baked in.
