Morning Commentary: Jobs Jobs Jobs

Foreign Exchange - Morning Commentary
Jobs Jobs Jobs
Share this story:
Facebook
Twitter
LinkedIn
Email
Andrew Kositkun
Andrew Kositkun
Foreign Exchange Head Trader
Earlier in the week, the ADP jobs report delivered a surprise when it showed the economy losing significantly less jobs than expected.  This led some in the markets to hope that a similar trend would reflect in the government’s jobs report, although others were still skeptical given the difference in how the two jobs reports are complied.  

However, even the most optimistic market observer likely did not expect today’s non-farm payroll report to show that the economy added 2.5 million jobs against expectations for a loss of 7.5 million jobs.  The jobless rate also fell from 14.7% to 13.3%.  North of the border, a similar dynamic was also at play with the Canadian economy adding 289.6 thousand jobs against expectations for a loss of 50 thousand jobs.  The unemployment rate in Canada also fell from 15.0% to 13.7%.  

While all the usual disclaimers apply—economies are coming off a low base after losing tens of millions of jobs and there still remains high uncertainty around the ability to recover—these reports are clearly positive and bodes well for the shape and speed of the recovery.  
HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT:
  • US-China relations are also helping the market’s risk on sentiment.   US Trade Representative Robert Lighthizer said he feels “very good” about the Phase One trade deal.  While recent rhetoric around US-China relations have been elevated lately, most of the actions have been around less material issues.  The viability of the Phase One deal was seen as a key gauge of the state of US-China relations. 
  • The latest round of Brexit talks have ended with little progress as the initial optimism at the start of the week fizzled out.  The impetus is now on the UK to request an extension before the July 1 deadline although the UK government remains steadfastly against this.  Despite this, market action appears to be pricing in an extension as the GBP finds itself up on the month.    
  • Crude prices continue to rally with the most recent leg higher coming on the back of reports that OPEC+ is set to extend its output cut agreement after overcoming resistance from Iraq.  
If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133.
Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos!
Follow City National Bank on social media:
Facebook Twitter LinkedIn Google Plus YouTube
Non-deposit investment products:
Are not FDIC insured,
Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and
Are subject to investment risks, including possible loss of the principal invested.
This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting.
Unsubscribe from this list  |  Update email preferences
This message has been sent to bank@banking.offers.report. Please do not reply to this email. To ensure the delivery of future emails, please add foreignexchange@emails.cnb.com to your email address book or safe sender list.
Copyright ©2020 City National Bank – All Rights Reserved.
350 South Grand Avenue, 12th Floor, Los Angeles, CA 90071
City National Bank is a subsidiary of Royal Bank of Canada.
TERMS & CONDITIONS  |  PRIVACY STATEMENT
Equal Housing Lender
NMLSR ID# 536994 | City National Bank Member FDIC
                                                           

Comments

Popular posts from this blog

Are tax hikes coming?