U.S. Session Forex Recap – May 6, 2016

  • U.S. initial jobless claims at 274K vs. 261K estimate
  • U.S. Challenger job cuts up 5.8% y/y in April vs. 31.7% previous
  • Canadian building permits slumped by 7.0% vs. projected 4.6% drop
  • Fed official Lockhart: Undecided about a June rate hike
  • Fed official Kaplan: Needs to see stronger GDP before voting to hike
  • Fed official Williams: Inflation has been encouraging, 2-3 rate hikes still reasonable this year

Is this the calm before the storm? The Greenback seems to be treading extra carefully ahead of today’s NFP release, but it did get some support from Fed officials’ speeches.

Major Events:

U.S. pre-NFP jobs figuresDollar traders are warming up for today’s NFP showdown by taking a look at Forex Gump’s Trading Guide and reviewing the latest batch leading employment indicators.

The freshly released Challenger job cuts report showed a 5.8% year-over-year increase in April, which marks a significant improvement from the earlier 31.7% gain. This translates to a 65K reduction in the workforce for the month, with most of the layoffs taking place in the energy sector.

Fed officials’ speeches – A number of Fed officials gave testimonies yesterday, providing clues on whether or not they might vote for a June rate hike. We’ve already heard from Lockhart earlier in the week but he did reiterate that he’s optimistic about U.S. economic prospects for the rest of the year, although he’s still undecided about tightening next month.

Meanwhile, Fed official Kaplan mentioned that he’d like to see a stronger GDP before he votes to increase rates. Fed official Williams highlighted the improvements in employment and inflation, maintaining that two to three rate hikes are still possible this year.

Major Currency Movers:

CHF – Surprisingly, even without any major events on deck (or was there?), the franc was one of the biggest movers as it lost a lot of ground to its forex peers.

USD/CHF popped up from consolidation around .9570 to a high of .9697, EUR/CHF surged past the 1.1000 resistance to a high of 1.1049, GBP/CHF is testing the resistance at the 1.4000 major psychological mark, and CHF/JPY is back down to 111.00.

 

Watch Out For:

  • 1:30 am GMT: RBA monetary policy statement (See how the RBA decision went down!)

See also:

Asian Session Recap

London Session Recap

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