US And Canadian Employment Reports Ahead Of The Weekend

America

Today's main focus is on the US employment data, but Canada's jobs report, and Mexico's CPI is also on tap. Expectations that the US grew a million jobs, or perhaps more accurately, around a million people returned to their jobs, have been in place since the March report. Unemployment is forecast to fall below 6%. Even if these forecasts are in the ballpark, it would still leave some 7 mln fewer employees than on the eve of the pandemic.  There will be another employment report before the FOMC meets again. Arguably significant further progress toward maximum employment is being seen. Canada reported a monster job gain of over 300k jobs in March. Proportionately, it is as if the US would have reported around a 3 mln increase.  Canada had reported a nearly 260k increase in February. After these two months of incredible improvement, the median forecast in Bloomberg's survey anticipates a loss of around 150k jobs. The unemployment rate, which fell to 7.5% in March from 8.2% in February, backs up to 8.0%. Mexico's price pressures are rising, and the headline rate is expected to have risen to a four-year high a little above 6% year-over-year last month. The base effect and energy play a big role, but Banxico cannot resume its easing cycle with such a report.  

The US dollar fell to a fresh four-year low against the Canadian dollar yesterday near CAD1.2140 but has come back better bid today, reaching CAD1.2180-CAD1.2190 in the European morning. Diverging job reports could see the greenback recover a bit further. Important resistance is seen around the previous support CAD1.2265-CAD1.2275. There is a $370 mln option at CAD1.2195 that expires today. The Mexican peso is bid at new highs for the week ahead of the opening of the North American session. The US dollar is trading near MXN20.05, having peaked earlier this week near MXN20.33. Last week's lows were near MXN19.85. Last week, the dollar snapped a four-week decline, but this week is off nearly 1%.  

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Read more by Marc on his site Marc to Market.

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