- Trump: Witkoff and Kushner will bring proposal to Putin to end the war
- Cleveland Fed President Beth Hammack is sounding decidedly hawkish on monetary policy
- Trump tells Fed: Lower the rate or I’ll stop trading with countries with which we have a deficit
- Canada Employment change for August -41,7K vs 15.0K estimate
- US August non-farm payrolls +162K vs +56K expected
Markets:
- WTI crude oil down $0.01 to $91.30
- US 10-year yields down 1.8 bps to 4.78%
- Gold down $39 to $4433
- AUD leads, JPY lags on the day
- S&P 500 down 0.4%
The jobs reports from the USA and Canada were the highlights and they diverged with a big win for the US and a miss for Canada, reversing what happened a month ago. The dollar initially jumped on non-farm payrolls, rising around 35 pips across the board but the moves seconds after the data were the extremes for the day.
There were the usual caveats in the jobs report as education and hospitality added much of the gains but overall it was still a strong report. The big retracement in the dollar was more about Fed thinking, with Waller yesterday indicating that the jobs report wouldn’t be a big factor in his thinking. Still, the implied odds of a hike moved to 58% from 49% and short-dated yields rose 4 bps.
The yen remained in focus and there were fresh signs of meddling as the pair fell more than 200 pips from the post-NFP jump. After reaching 155.40 the pair climbed steadily back to 156.26 to finish the day up around 50 pips. It’s been a volatile start to the month for the pair so far.
USD/CAD was a big mover on the divergent jobs reports. The pair rose to 1.3871 at the peak before giving back 35 pips as the dollar broadly eroded. The Bank of Canada will get another jobs report to look at before its next meeting.
After the jobs report, news flow focused on Iran. Various reprots talked about ballistic missile launches but Trump himself later said there was no shooting, so that left everyone watching confused. Oil had fallen to $89.00 but turned around to finish at $91.34 in part on those headlines but largely on long weekend risk.
Have a wonderful Labo(u)r Day.
This article was written by Adam Button at investinglive.com.