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The dollar shrugged off upbeat economic reports and the fact that the healthcare bill made it through Congress as it returned most of its post-FOMC gains to its peers.

  • Initial jobless claims at 238K vs. 246K expected, 257K previous
  • Challenger job cuts down 42.9% year-over-year in April
  • Preliminary non-farm productivity down 0.6% in Q1 vs. expected 0.1% uptick
  • Preliminary unit labor costs up 3.0% in Q1 vs. projected 2.5% gain
  • U.S. trade deficit narrowed from $43.8B to $43.7B vs. expected $44.9B shortfall
  • U.S. factory orders posted 0.2% uptick vs. estimated 0.6% gain
  • Canadian trade deficit narrowed from 1.1B CAD to 0.1B CAD vs. expected 0.3B CAD surplus

Major Events:

Healthcare bill passed Congress 217-213

In a (late) victory for the Trump administration, the healthcare bill aka Obamacare repeal made it through the House of Representatives in a 217-213 vote and will now proceed to Senate.

Recall that this was previously seen as one of the biggest tests for the Trump administration since a lot of their fiscal policy reforms hinge on the impact of healthcare spending on the budget. Now the GOP backed out of putting this to a vote last March since they knew that they didn’t have enough support back then.

This time, the healthcare bill made it through with a slim lead as 20 Republicans still voted against it and no Democrats voted in favor. In his press conference, Trump took another jab at Obamacare, congratulated Republicans for getting the party together, and promised that “the biggest tax cut in U.S. history” is coming up next.

Market watchers don’t seem to be buying this, though, as many believe that the healthcare bill wouldn’t even make it past the Senate. Several senators are working on their own version of a healthcare bill so the drama ain’t over ’til it’s over.

Mostly upbeat U.S. data

Uncle Sam printed another batch of mostly strong reports leading up to the NFP release later today, but dollar bulls seem to have shrugged these off.

Challenger job cuts dropped 42.9% on a year-over-year basis last month, signaling positive momentum in hiring. This translates to a 15% decrease in downsizing since March as layoffs haven’t been as widespread in sectors like tech or energy compared to the retail industry. Meanwhile, initial jobless claims printed a smaller than expected 238K increase versus the projected 246K figure.

For Q1, preliminary unit labor costs increased by 3.0% versus the 2.5% consensus to reflect stronger upside pressures on wages and inflation. Preliminary non-farm productivity ticked 0.6% down instead of rising by 0.1% and this also translates to higher wage pressures.

On a less cheery note, U.S. factory orders rose only 0.2% in March. This is slower than the estimated 0.6% gain and the earlier 1.3% increase.

  • Dow 30 index closed 0.03% down to 20,951.47
  • S&P 500 rose 0.06% to 2,389.52
  • Nasdaq closed 0.05% higher to 6,075.34

Major Market Movers:

USD

The Greenback coughed up its gains from the previous trading day as traders might be booking profits ahead of today’s NFP release.

EUR/USD popped up from 1.0932 to a high of 1.0985, USD/JPY dropped from 112.94 to a low of 112.34, USD/CHF tumbled below the .9700 handle, and AUD/USD is up to a high of .7416.

Watch Out For:

  • Japanese banks closed for the holiday
  • 4:00 am GMT: New Zealand inflation expectations (1.9% previous)