US & Canadian job data to kick off big day ahead for markets
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SUMMARY
- US Jobless Claims and Canadian Employment Report up first at 8:30amET.
- Jerome Powell to speak via webcast hosted by the Brookings Institution at 9amET.
- OPEC+ meeting commences to commence at 9amET. Eurogroup reconvenes at 10amET.
- ECB releases minutes from its March 18th emergency meeting.
- Broader USD trading mixed. May WTI crude trade up 3% after being +8% earlier.
- Russia hinting at cutting 2mln bpd if others participate. Saudi Arabia want to use April baseline.
- Final decision from OPEC+ might not come until after G20 energy minister meeting tomorrow.
ANALYSIS
USDCAD
Dollar/CAD is meandering sideways with the broader USD this morning as traders await a big day ahead of headlines. The first batch of them will come out at 8:30amET, when both the US and Canadian announce updates on the dire states of their labor markets. Expectations below:
US Jobless Claims (week ending April 4): +5.25M vs +6.64M last week
Canadian Employment Change (March): -350k vs +30.3k in February
Canadian Unemployment Rate (March): 7.2% vs 5.6% in February
The OPEC+ meeting is then expecting to commence around 9amET, where the world’s largest oil producers will try to agree upon a coordinated cut in production. Russia has hinted at cutting 2mln bpd if all the countries work together, which is why we think May WTI futures were trading up 8% earlier. We may have to wait though until the conclusion of tomorrow’s G20 energy ministers meeting at 8amET in Riyadh before a final deal is announced. Fed chairman Jerome Powell is then expected to give an economic update in a webcast hosted by the Brookings Institution at 9amET. Finally, the Eurogroup meeting, which failed to produce a coronavirus rescue package for European countries yesterday, is expected to recommence at 10amET.
What could very well see a volatile NY session ahead today, but what is more is that this could extend into a very illiquid Good Friday holiday session tomorrow. USDCAD continues to respect the boundaries of a new price range that formed yesterday, 1.3990s-1.4080s, which is well within the 1.3900-1.4200 range we were looking for in late March.
USDCAD DAILY
USDCAD HOURLY
MAY CRUDE OIL DAILY
EURUSD
Euro/dollar ultimately struggled with the 1.0870s yesterday. The market failed to get back above this level after the NY options cut and it has served as resistance ever since. Some broad USD buying/oil selling has just come in now following reports that Saudi Arabia is looking at April as the baseline for any agreed upon production cuts. The European Central Bank released the minutes of its March 18th emergency policy meeting at 7:30amET this morning. Full details here, but unfortunately there’s not much to glean here in terms of new “news” in our opinion. We would note the continued widening of the 3-month EURUSD cross currency basis swap this morning (wider 4 days in a row) as a growing EURUSD negative here. It has widened from +60bp on Monday to +32 now.
EURUSD DAILY
EURUSD HOURLY
JUNE GOLD DAILY
GBPUSD
Sterling continued higher over the last 24hrs with the further improvement in broad risk sentiment. We also think yesterday’s break above the 1.2380s brought out some technical buyers as well. They’ve taken a pause though at trend-line resistance in the 1.2440s this morning though, and it makes sense too given the big US jobless claims report coming out next.
GBPUSD DAILY
GBPUSD HOURLY
EURGBP DAILY
AUDUSD
The Aussie is struggling at the trend-line resistance in the 0.6240s this morning, after traders wasted no time vaulting the market to its next key level once the 0.6170s were regained. We think this will be AUDUSD’s pivotal level going into a potentially volatile NY session and Easter long weekend ahead. A close above could usher in even further gains to the 0.64 handle, whereas a close below it may bring about some profit taking from new long positions.
AUDUSD DAILY
AUDUSD HOURLY
USDCNH DAILY
USDJPY
Dollar/yen continues to mark time ahead of the big events on deck for today. It continues to trade within the 108.50-1.0950 price range we outlined earlier this week and we think this morning’s 1.3blnUSD option expiry at the 108.95-109.00 strikes could potentially dampen volatility further.
USDJPY DAILY
USDJPY HOURLY
JUNE S&P 500 DAILY
Charts: Reuters Eikon
About the Author
Erik Bregar - Director, Head of FX Strategy
Erik works with corporations and institutions to help them better navigate the currency markets. His desk provides fast, transparent, and low cost trade execution; up to the minute fundamental and technical market analysis; custom strategy development; and post-trade services -- all in an effort to add value to your firm’s bottom line. Erik has been trading currencies professionally and independently for more than 12 years. Prior to leading the trading desk at EBC, Erik was in charge of managing the foreign exchange risk for one of Canada’s largest independent broker-dealers.
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