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Today is another NFP Friday, so volatility and directional movement on many pairs were a bit limited. Kiwi pairs were an exception, though, since the Kiwi just plowed through its forex rivals and come out on top.

  • Spanish unemployment change: -111.9K vs. -110.2K expected, -129.3K previous
  • U.K. construction PMI: 56.0 vs. 52.7 expected, 53.1 previous
  • Euro Zone PPI m/m: 0.0% vs. 0.2% expected, -0.3% previous
  • Euro Zone PPI y/y: 4.3% vs. 4.5% expected, 3.9% previous
  • U.S. NFP report coming up

Major Events/Reports

NFP Friday!

Today is another NFP Friday! And as usual, both directional movement and volatility got sapped on many pairs, as forex traders hunkered down ahead of the NFP report.

By the way, if you’re planning to trade the upcoming NFP report and need to get up to speed on what happened last time and what’s expected this time, then make sure read up on Forex Gump’s Forex Preview here.

Commodities gutted

Most commodities got whupped pretty hard during the course of the morning London session.

Oil benchmarks got whupped real hard.

  • U.S. WTI crude oil was down by 1.99% to $47.40 per barrel
  • Brent crude oil was down by 2.00% to $49.62 per barrel

Base metals were mixed but most got a whupping.

  • Copper was down by 2.03% to $2.535 per pound
  • Nickel was down by 0.72% to $8,757.50 per dry metric ton

Precious metals also got some good ole fashion whupping, yee-haw!

  • Gold was down by 0.32% to $1,262.95 per troy ounce
  • Silver was down by 0.30% to $17.229 per troy ounce

Market analyst attributed the broad-based commodities slide on demand worries over top commodities importer China.

With regard to oil, however, some market analysts also pointed to the U.S. withdrawal from the Paris climate pact as a sign that the U.S. is ready to churn out more oil, which heightened concern over the oil glut.

U.K. construction PMI jumps higher

According to Markit’s latest construction PMI report, the U.K.’s construction PMI reading jumped from 53.1 to 56.0 in May. This is great because the consensus was a drop to 52.7. Moreover, May’s 56.0 reading is a 17-month high, thanks to “fastest upturn in residential work since the end of 2015.”

Also, “May data also pointed to solid rises in civil engineering and commercial building.” Sadly, “commercial development remained the weakest performing sub-category.” But on a more upbeat note, “the latest rise in activity was the fastest since March 2016.”

Even better, new business intakes for all building types saw a pick up in May, with “the rate of expansion the fastest seen so far in 2017.” But on a more downbeat note, survey respondents noted that “heightened economic uncertainty continued to act as a brake on client spending.”

Another upbeat day in Europe

Looks like Europe is closing out the week on a high note, although that may change when the NFP report comes out later.

  • The pan-European FTSEurofirst 300 was up by 0.73% to 1,549.33
  • Germany’s DAX was up by 1.57% to 12,863.50
  • The blue-chip Euro Stoxx 50 was up by 1.24% to 3,612.00

U.S. equity futures also got a lift from all that optimism.

  • S&P 500 futures were up by 0.21% to 2,434.50
  • Nasdaq futures were up by 0.32% to 5,840.50

Market analysts say the risk-on vibes was due to risk sentiment spillover from the earlier sessions.

Other market analysts, meanwhile, pointed to capital flows in favor of the Euro Zone amid an increase in corporate deal-making, which is a sign of optimism over the Euro Zone economy.

Major Market Mover(s):

NZD

Most currency pairs appeared reluctant to bust the moves, but Kiwi pairs were obviously an exception since the Kiwi just steamrolled its forex rivals.

Interestingly enough, commodities were retreating during the session. So aside from the risk-on vibes, there’s really not much else that could have driven demand for the Kiwi.

NZD/USD was up by 15 pips (+0.21%) to 0.7090, NZD/CAD was up by 23 pips (+0.25%) to 0.9589, NZD/CHF was up by 19 pips (+0.29%) to 0.6889

Watch Out For:

  • 12:30 pm GMT: U.S. non-farm payrolls (182K expected, 211K previous), jobless rate (steady at 4.4% expected), average hourly earnings (0.2% expected, 0.3% previous)
  • 12:30 pm GMT: U.S. trade balance (-$46.1B expected, -$43.7B previous)
  • 12:30 pm GMT: Canada’s trade balance (-$0.02B expected, $-0.14B previous)