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The Greenback was able to add to its gains from earlier as U.S. bond yields rose.

The euro, meanwhile, found itself at the bottom of the forex heap, thanks to a bearish kick near the end of the session.

As for the pound, it found sellers ahead of the U.K.’s jobs report but had a more mixed performance when the jobs report painted a mixed picture.

  • French final CPI m/m: 0.2% vs. 0.1% expected, 0.1% previous
  • Swiss PPI m/m: 0.4% vs. 0.3% expected, -0.2% previous
  • U.K. jobless rate: steady at 4.2% as expected
  • U.K. average earning (3m y/y): 2.6% vs. 2.7% expected, 2.8% previous
  • Claimant count change in the U.K.: 31.2K vs. 13.3K expected, 15.7K previous
  • Euro Zone flash GPP q/q: no change from 0.4% as expected
  • Euro Zone industrial production m/m: 0.5% vs. 0.6% expected, -0.9% previous
  • German ZEW economic sentiment: -8.2 vs. -8.0 expected, -8.2 previous
  • Euro Zone ZEW economic sent8iment: 2.4 vs. 2.0 expected, 1.9 previous

Major Events/Reports:

U.K. jobs report

The Office for National Statistics (ONS) released the U.K.’s latest jobs report during the session.

And according to the report, the jobless rate in the three months to March managed to meet expectations by holding steady at 4.2%, which is a 42-year low.

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?

Unfortunately, the number of people who claimed unemployment benefits jumped by 31.2K in April, which is a bigger increase compared to the +13.3K consensus, as well as the 15.7K increase reported in March.

Moving on to wage growth, average weekly earnings only grew by 2.3% year-on-year in March. This marks the third straight month of ever weaker readings.

And this brings the three-month average to 2.6%, which is slower than the expected +2.7% and is also a weaker reading compared to the previous three-month average of +2.8%.

A closer look at the details, however, shows that the weaker wage growth was due to the bigger decline in bonuses paid (-0.5% vs. -0.1% previous).

If bonuses are stripped, then regular weekly earnings actually grew by 3.0% in March, which is the strongest reading since July 2015.

And if inflation is taken into account, then real wage growth (excluding bonuses) increased by 0.7%, marking the third straight month of annual growth after 10 consecutive months of declines. The increase is also the strongest since December 2016.

Fading risk aversion in Europe

The risk-off vibes from Asia carried over into the European session since the major European equity indices opened broadly lower and then proceeded to plumb new intraday lows.

However, the major European equity indices later pulled away from their lows and began clawing their way back up, with most already in the green by the end of the session, which is a sign that risk appetite is making a comeback and/or risk aversion was fading away.

And according to market analysts, the risk-off vibes from earlier was due to poor German economic data released during the session, as well as poor Chinese data from earlier.

As for the returning risk-on vibes, there’s no clear reason for that yet. However, market analysts did mention earlier that banking shares were fighting back against the bearish pressure because of positive earnings reports. Perhaps the rise in banking shares helped to improve overall risk sentiment.

  • The pan-European FTSEurofirst 300 was up by 0.16% to 1,540.75
  • Germany’s DAX was still up by 0.05% to 12,983.41
  • The blue-chip Euro Stoxx 50 was up by 0.02% to 3,566.95

Global bond yields rise

Global bond yields were mostly higher during the morning London session.

The returning risk-on vibes may have helped to dampen demand for bond yields, sending bond yields higher.

Other than that, market analysts also said that European bond yields were on the rise because of higher inflation expectations due to the recent rise in oil prices, as well as ECB Villeroy’s hawkish comments from yesterday.

  • German 10-year bond yield up by 2.42% to 0.629%
  • French 10-year bond yield up by 2.09% to 0.854%
  • U.K. 10-year bond yield up by 1.15% to 1.489%
  • U.S. 10-year bond yield up by 0.92% to 3.023%
  • Canadian 10-year bond yield up by 0.99% to 2.449%

Major Market Mover(s):


The Greenback trumped all its rivals during the morning London session and also happens to be the best-performing currency of the day (so far).

There weren’t really any positive catalysts for the Greenback, but it does look like USD pairs were taking some directional cues from the rise in U.S. bond yields. Other market analysts share the same opinion.

USD/JPY was up by 23 pips (+0.21%) to 110.09, USD/CAD was up by 41 pips (+0.32%) to 1.2843, USD/CHF was up by 21 pips (+0.21%) to 1.0026


The euro was the worst-performing currency of the morning London session and is now the second weakest currency of the day (so far).

A bunch of low-tier and mid-tier Euro Zone economic report were released during the session, but the euro barely reacted to them.

In fact, the euro traded sideways for the most part until selling pressure hit EUR pairs across the board near the end of the session.

There was no clear reason for this late selling pressure. However some market analysts were saying that Greenback strength is the reason for the euro’s weakness.

EUR/USD was down by 50 pips (-0.42%) to 1.1880, EUR/JPY was down by 30 pips (-0.23%) to 130.78, EUR/CHF was down by 28 pips (-0.23%) to 1.1909


The pound was mixed for the session, despite the release of the U.K.’s latest jobs report, likely because the jobs report was mixed (but with positive undertones for wage growth).

Anyhow, the pound was slapped lower ahead of the jobs report, possibly because of preemptive positioning (or a leak). And when the U.K.’s jobs report was released, the pound tossed and turned for a while before becoming more mixed.

GBP/USD was down by 39 pips (-0.29%) to 1.3516, GBP/JPY was down by 11 pips (-0.07%) to 148.81, GBP/AUD was up by 13 pips (+0.07%) to 1.8045

Watch Out For:

  • 12:30 pm GMT: Headline (0.3% expected vs. 0.6% previous) and core (0.5% expected vs. 0.2% previous) readings for U.S. retail sales
  • 12:30 pm GMT: Empire State manufacturing index (15.0 expected vs. 15.8 previous)
  • 2:00 pm GMT: U.S. business inventories (0.1% expected vs. 0.6% previous)
  • 2:00 pm GMT: NAHB U.S. builders survey (70.0 expected vs. 69.0 previous)
  • 4:45 pm GMT: San Francisco Fed President John Williams will speak
  • Dairy auction currently underway (-1.1% previous); auction usually ends at around 2:00 pm GMT