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The pound was kicked lower after the U.K.’s jobs report was released. The Swissy, meanwhile, was feeling a bit under the weather, likely because of the risk-on vibes. As for the Loonie, it managed to outperform its peers, likely because of the rise in oil prices.

  • U.K. jobless rate: 4.2% vs. steady at 4.3% expected
  • U.K. average earning (3m y/y): 2.8% vs. 3.0% expected, 2.8% previous
  • Claimant count change in the U.K.: 11.6K vs. 13.3K expected, 15.1K previous
  • German ZEW economic sentiment: -8.2 vs. -1.0 expected, 5.1 previous
  • Euro Zone ZEW economic sentiment: 1.9 vs. 7.3 expected, 13.4 previous

Major Events/Reports:

U.K. jobs report

The Office for National Statistics (ONS) released the U.K.’s latest jobs report earlier. And it revealed that the jobless rate ticked lower to 4.2% in the three months to February.

This is good news because the consensus was for the reading to hold steady at 4.3%. By the way, did I mention that the 4.2% reading is a 42-year low?

Moving on, the number of people who claimed unemployment benefits only increased by 11.6K in March, which is less than the expected 13.3K increase, as well as the previous month’s 15.1K rise.

So far, so good, right? Well, wage growth unfortunately failed to impress. since average weekly earnings only grew by 2.3% year-on-year in February.

This marks the second straight month of ever weaker wage growth and is also the weakest reading in seven months to boot.

Moreover, the slowdown pulls the three-month running average to just +2.3%, missing the +3.0% consensus by a wide margin.

But on a happier note, the weaker wage growth was due to the 3.3% decrease in bonuses given.

If bonuses are stripped, then regular weekly earnings actually grew by 2.9% in February, which is the strongest reading since July 2015.

If inflation is taken into account, then real wage growth (excluding bonuses) increased by 0.5%, marking the second month of annual growth (+0.1% previous) after 10 consecutive months of contractions.

Oil floats as other commodies sink

Commodities were broadly in the red during the morning London session. However, not all commodities were in retreat since oil benchmarks were doing just fine and even captured some modest gains.

The slide in commodity prices was likely due to the Greenback’s relative strength, which makes globally-traded commodities relatively more expensive.

And for reference, the U.S. dollar index was up by 0.12% to 89.25 for the day when the session ended.

Other than that, market analysts also pointed to poor Chinese industrial production data from the earlier session as another reason for the slide in base metals.

Demand for precious metals, meanwhile, may have also been dampened by the risk-on vibes.

As to why oil was well-supported, market analysts attributed that to potential supply disruptions in the Middle East, as well as weaker oil output from embattled Venezuela.

Precious metals were in negative territory.

  • Gold was down by 0.43% to $1,344.9 per troy ounce
  • Silver was down by 0.28% to $16.630 per troy ounce

Base metals were actually mixed but most were in the red.

  • Copper was down by 0.86% to $3.069 per pound
  • Nickel was down by 1.26% to $13,962.50 per dry metric ton

As mentioned earlier, oil benchmarks were swimming against the red tide.

  • U.S. WTI crude oil was up by 0.08% to $66.27 per barrel
  • Brent crude oil was up by 0.04% to $71.44 per barrel

Risk appetite revived in Europe

The downbeat vibes were apparently chased away and risk-taking took their place today since the major European equity indices were raking in gains.

And according to market analysts, the risk-on vibes were mainly due to easing geopolitical tensions over Syria, as well as deal-making activity and optimism during the earnings season.

  • The pan-European FTSEurofirst 300 was up by 0.43% to 1,486.23
  • Germany’s DAX was up by 0.80% to 12,491.16
  • The blue-chip Euro Stoxx 50 was up by 0.59% to 3,461.65

U.S. equity futures were also well-supported, so the risk-friendly vibes may carry over into the upcoming U.S. session.

  • S&P 500 futures were up by 0.49% to 2,695.00
  • Nasdaq futures were up by 0.46% to 6,742.75

Major Market Mover(s):

CAD

The Loonie was the top-performing currency of the morning London session, very likely because of the rise in oil prices.

However, it’s worth mentioning that oil initially dipped but the Loonie was already on its way up, so something else may have also been pushing the Loonie higher.

However, there weren’t any apparent catalysts, aside from preemptive positioning ahead of Canadian economic data for later and tomorrow’s BOC statement.

USD/CAD was down by 7 pips (-0.06%) to 1.2555, EUR/CAD was down by 46 pips (-0.30%) to 1.5526, AUD/CAD was down by 19 pips (-0.19%) to 0.9756

CHF

The Swissy was clearly lagging behind its peers. In fact, the Swissy was the worst-performing currency of the morning London session, very likely because of the risk-friendly environment in Europe.

USD/CHF was up by 33 pips (+0.36%) to 0.9624, CAD/CHF was up by 29 pips (+0.38%) to 0.7666, GBP/CHF was up by 20 pips (+0.14%) to 1.3797

GBP

The pound was the second biggest loser of the morning London session, thanks to a wave of selling pressure after the U.K.’s latest jobs report was released.

The pound’s slide was likely in response to the weaker-than-expected average weekly earnings growth. Bulls were trying to fight back, though, likely because the report was actually mixed, with positive undertones for real wage growth.

GBP/USD was down by 30 pips (-0.21%) to 1.4335, GBP/NZD was down by 18 pips (-0.09%) to 1.9523, GBP/CAD was down by 40 pips (-0.23%) to 1.7998

Watch Out For:

  • 12:30 pm GMT: Canadian foreign security purchases ($7.24B expected vs. $5.68B previous)
  • 12:30 pm GMT: Canadian manufacturing sales (0.8% expected vs. -1.0% previous)
  • 12:30 pm GMT: U.S. building permits (1.32M expected vs. 1.30M previous) and housing starts (1.27M expected vs. 1.24M previous)
  • 1:15 pm GMT: U.S. industrial production (0.3% expected vs. 1.1% previous) and capacity utilization rate (77.9% expected vs. 78.1% previous)
  • 1:15 pm GMT: San Francisco Fed President John Williams will speak
  • 2:00 pm GMT: U.S. Governor Randal Quarles will testify before the House Financial Services Committee
  • 9:40 pm GMT: Atlanta Fed President Raphael Bostic is scheduled for an interview
  • Dairy auction currently underway (-0.6% previous); auction usually ends at around 2:00 pm GMT