- CAD boosted by employment data while US data disappoints
- UK GDP this morning - forecasts poor
Canada's employment report on Friday was better than forecast. The unemployment rate fell to 5.4%; down from 5.7% previously and the lowest level since 1976. That was cause for celebration and the Canadian Dollar became instantly more expensive. That has seen the GBPCAD exchange rate drop to levels we've not seen since January. There is some GBP support around this C$1.68 level though, so risk averse CAD sellers may wish to protect some of their requirements here. We have Canadian housing data later today to add to the melee.
Similarly, the Sterling - Japanese Yen rate is back at levels not seen since the turn of the year due to overnight data showing further improvement in Japan's economic growth. 2.2% is a good healthy annual growth rate and the 4th quarter of solid growth in a row. That is partly what has brought the GBPJPY rate down to 136 and now 138 after a little bounce.
Friday's US jobs data was disappointing compared to the forecasts. Just 75,000 new jobs were created last month. I downplay it because the markets were expecting nearly double that number. I am sure, however, that the data is fantastic news for those 75,000 souls who now have gainful employment. The average wage rise was also a little weaker, so the Federal Reserve's talk of rate cuts may be ramped up. That all weakened the USD somewhat.
We will see UK economic growth data this morning; an annualised growth rate of something like 1.7% is likely. Of more concern is the likely drop in industrial and manufacturing production. That data is forecast to be pretty poor. As usual, Brexit will be cited as the problem but I disagree. The delay in Brexit is a problem. Some kind - in fact any kind - of certainty would allow companies to get back to their jobs and out of the doldrums caused by 3 years of sloppy prevarication. We will also see trade deficit numbers today along with the NIESR GDP estimates. So Sterling is in for a potentially bumpy ride.
Later we will get US jobs data and later the NZ manufacturing sales volumes.
The only real controversy over the weekend was whether Sebastian Vettel could have left space for Lewis Hamilton on the racing line or not. There is a lot of heated debate on the matter. As a fan of Lewis, I found it interesting to see Ferrari actually penalised for something for a change but maybe this wasn't the right decision. Either way Vettel's strop was great entertainment.