Morning Commentary: A Little Something for Everyone

Foreign Exchange - Morning Commentary

A Little Something for Everyone

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Alan Rose
Alan Rose
Foreign Exchange Senior Trader

Market participants, traders, and investors do a pretty quick job of parsing economic data to look beyond the headline prints that sometimes can be misleading relative to the whole story. On the surface, today’s U.S. Labor Department report on employment looked exceptionally strong with job creation outpacing estimates and the UR dropping to a low not seen since December 1969. But, the underlying data was not as strong and U.S. interest rates are nearly unchanged, U.S. equities are scheduled to open slightly higher and the U.S. dollar (DXY) is slightly stronger for the third day in a row after falling in the previous three days.

 

The U.S. created 263,000 in April against expectations of a gain of 190,000. The UR dropped from 3.8% to 3.6%, and those two numbers are making all the headlines. However, average hourly earnings (AHE) came in below expectations at 0.2% with the YoY rate remaining at 3.2%. The Labor Force Participation rate dropped from 63.0% to 62.8% which takes away from the drop in the UR to 3.6%. All in all, this is a rock solid report with a little something for everyone and continues to portray an economy that is humming along providing the backdrop for potentially the longest peacetime expansion since World War II.

HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT:
  • EZ CPI for April came in stronger than forecast at 1.7% YoY compared to the 1.4% in March with core prices also rising to 1.2%. This is the highest reading since November. The slightly higher inflation reading was no help for the euro today as it is fractionally weaker and down for the third day in a row after rising for three days in a row.
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