This morning’s weaker than expected US jobs data drives the dollar, equities, and bond yields lower
June 7, 2019
May’s US jobs data released this morning was weaker than expected. Non-farm Payrolls rose 75,000 missing estimates of 175,000; the Unemployment rate held at near a 50-year low at 3.6%, while Average Hourly Earnings climbed 3.1% y/o/y, also less than expected. The reaction in the markets was quick and severe. The dollar declined across the board by about 0.5%, equities fell as did bond yields, with UST 10-yr yields dropping 9 bps to 2.07%.
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June 7, 2019
EUR/USD 1.1320 GBP/USD 1.2741 USD/CAD 1.3283 AUD/USD 0.7001 USD/JPY 108.05 USD/CNH 6.9410 USD/ILS 3.5830 USD/MXN 19.7049 USD/CHF 0.9884 USD/INR 69.2410
The dollar’s kneejerk reaction to the large weaker-than-expected US jobs data was to fall about 0.50% across the board. The dollar now stands at its weakest level since March.GBP
The UK pound jumped to one-month highs versus the dollar, reaching $1.2750 following the weak US jobs data. Today, PM May stepped down as leader of the ruling Conservation Party, but will stay on as PM until a replacement is found. The search is well underway with Boris Johnson, former London mayor and foreign secretary, as the current favorite.EUR
The euro is trading near its highest levels since March after it gapped 0.5% following the US jobs data. Tensions eased between Italy and the EU, pushing Italian 10-year yields down 18 bps today to 2.30%, their lowest level in over a year.CAD
Canada’s better-than-expected jobs data contrasted sharply with the weak US data. The Canadian dollar benefited more so than most other currencies, reaching 1.3300 for the first time since late March. Canada’s unemployment fell to 5.4%, its lowest level since 1976.ASIA/PACIFIC
The Chinese yuan (CNY) moved little overnight and this morning following the weak US jobs data. However, the offshore yuan (CNH) weakened to 6.96 overnight, its worst level versus the dollar since last December following comments by the governor of the People’s Bank of China suggesting that the yuan breaking through the 7.00 level is not unthinkable.
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