Dollar Gets No Support From US Non-Farm Payrolls Report

Market Reviews

US dollar fell after worse than expected employment data. But still, the dollar is staying in tight range against other major currencies including the euro, British pound, Swiss franc, Australian dollar and Canadian dollar.

US Nonfarm payrolls (NFP) rose by 164.000 in April. The data was lower than the consensus estimate for the creation of 189.000 jobs and below the 204.000 positions that the ADP report indicated on Wednesday. Average hourly earnings advanced 0.1% month-on-month in April, below expectations for a 0.2% gain. On an annualized basis, wage inflation grew 2.6% in April, below expectations for a 2.7% rise. The jobless rate fell from 4.1% to 3.9%, beating consensus expectations for it to slip to just 4.0%. April's reading is the lowest level since 2000.

Eurozone PMI services fell to 54.7 in April, down from 55.0 in March. Eurozone PMI composite was finalized at 55.1, revised down from 55.2. German PMI composite fell to 54.6 (19-month low). Italy PMI composite fell to 15-month low (52.9). France PMI composite grew 56.9 (the highest level in two months). Eurozone retail sales increased by only 0.1% in March, below the forecast of +0.5%. Retail sales rose by an annualized 0.8%, compared to 1.8% in February. Economists had expected a reading of 1.9%.

US-China trade talks ended today in Beijing. It is reported that US Treasury Secretary Steven Mnuchin gave China a “detailed list of asks”. In short, US asks China to narrow trade surplus by US 200B by 2020, reduce trade imbalance immediately, halt subsidies for advanced tech, cut tariffs on all products to levels no higher than that of US, refrain from targeting US farmers and agricultural products, refrain from retaliating against US restrictions on investments from China.