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The dollar was supported by a bit of recovery and risk-taking from the previous sessions.

Meanwhile, the Loonie also got a nice boost after Trudeau shared that NAFTA negotiations are “moving forward.”

  • Challenger job cuts up from -4.3% to 39.4% in March
  • U.S. initial jobless claims up from 218K to 242K vs. 225K expected
  • Canada’s trade deficit widens from 1.9B CAD to 2.7B in February
  • U.S. trade deficit wider from $56.7B to $57.6B in February
  • FOMC voting member Bostic: getting back to “neutral” rate a priority

Major Events/Reports:

U.S. trade balance

Uncle Sam’s trade deficit clocked in at $57.6B in February, which is wider than the $56.9B figure that markets had expected AND the upwardly revised $56.7 deficit in January. That’s the highest since October 2008!

Turns out, both exports and imports hit record highs for the month. Exports shot up by 1.7% on the back of higher sales of industrial supplies and materials.

Meanwhile, imports improved by 1.7% due to higher orders of capital goods, civilian aircraft, materials-handling equipment, and industrial supplies and materials.

The U.S. trade deficit tightened against China, the EU, Japan, and Canada, but widened against Mexico. Somebody update the Donald!

“Significant” NAFTA progress?

Traders shrugged off a wider trade deficit report from Canada after Prime Minister Justin Trudeau reassured reporters that the U.S., Mexico, and Canada are on their way to making a new NAFTA agreement. He shared that:

“I believe we’re in a moment where we’re moving forward in a significant way. Hopefully there will be some good news coming.”

Trudeau’s remarks, together with other Mexican officials’ updates have led investors to believe that an announcement will be made as early as the end of next week at a summit in Peru.

Overall risk-taking

U.S. session traders took cues from the European markets and took on a bit more risk as trade war fears continue to ease. It also helps that some traders are expecting upside surprises for the upcoming NFP report.

  • Dow 30 index is up 389.17 points to 24,033.36 (+1.65%)
  • S&P 500 index is up 32.57 points to 2,514.45 (+1.26%)
  • Nasdaq is up 34.44 points to 7,076.55 (+0.49%)

Bond yields are also in the green:

  • U.S. 10-year yield is up to 2.836%
  • U.S. 5-year yield is up to 2.640%
  • U.S. 30-year yield is up to 3.075%

Major Market Mover(s):

USD

The Greenback brought sexy back as a bout of risk-taking in the U.S. markets and optimism ahead of the NFP release improved demand for the dollar.

EUR/USD is down by 23 pips (-0.19%) to 1.2234, USD/JPY is up by 41 pips (+0.38%) to 107.46, and GBP/USD is up by 26 pips (+0.19%) to 1.4002.

CAD

Positive NAFTA updates, higher oil prices, and a bit of risk-taking all worked in favor of the Loonie today.

USD/CAD is down by 21 pips (-0.16%) to 1.2758, CAD/JPY is up by 46 pips (+0.55%) to 84.23, and EUR/CAD is down by 52 pips (-0.33%) to 1.5610.

Watch Out For:

  • China’s markets out on holiday
  • 11:30 pm GMT: Japan’s household spending (y/y) (0.3% expected, 2.0% previous)
  • 12:00 am GMT: Japan’s cash earnings (y/y) (0.5% expected, 1.2% previous)
  • 5:00 am GMT: Japan’s leading indicators