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US job data ahead - what can we expect from the majors?

business-articlesUS job data ahead - what can we expect from the majors?
• EUR – Eurozone retail sales expected to accelerate in March
• USD – US Wages, payrolls and unemployment readings ahead 
• CAD – Canada’s Ivey purchasing managers’ index 

Eurozone retail sales in the spotlight

With this week’s Eurozone GDP and consumer price inflation readings out of the way, market focus will now shift to the bloc’s retail sales print for March and the Eurozone’s Markit composite PMI reading.

Analysts currently expect retail sales to climb from 1.8% to 1.9% year-on-year, with a monthly rise forecast from 0.1% to 0.5%.
The composite PMI reading is expected to remain steady at 55.2.

Given the Eurozone’s disappointing inflation and economic growth readings for Q1 it is unlikely that the single currency will see much support from these results, with the European Central Bank (ECB) expected to remain dovish until inflation starts rising back towards target levels.

Instead, the primary driver will most likely be the performance of the US dollar (USD), with a weak ‘Greenback’ liable to help keep the euro afloat, and a rallying ‘Greenback’ having the potential to knock it down a peg or two.

US labour market expected to tighten further

The US dollar could find room to rally today, with investors expecting the latest labour market readings to be resoundingly upbeat.

Analysts are forecasting that the US unemployment rate will fall to 4% in April (its lowest rate in 17 years) with 191k non-farm payrolls added – almost double the amount seen in the previous period.

Average hourly earnings are expected to hold steady (year-on-year) at 2.7%.

Given that the US Federal Open Market Committee has repeatedly pointed to the strength of the US labour market as a deciding factor in hawkish policy measures this year, an upbeat run for April should keep the central bank on track for a rate rise in June.

Canadian PMI expected to remain high 

Canada’s Ivey PMI result – a measure of month-to-month variation in economic activity – is due for release today, with a small rise forecast from 58.8 to 58.9.

Whether this will be enough to negate yesterday’s disappointing expansion in the Canadian trade deficit remains to be seen, however.

There are also ongoing concerns regarding trade tensions between the US and China, with sluggish NAFTA negotiations also continuing to weigh on policymaker attitudes at the Bank of Canada (BoC).

If NAFTA negotiations drag on in the coming weeks it could spell trouble for the ‘Loonie’.

Upcoming dat

Friday 04 May 
08:55 EUR – German Markit Composite PMI (April)
09:00 EUR – Eurozone Markit Composite PMI (April)
10:00 EUR – Eurozone Retail Sales (March)
13:30 USD – US Average Hourly Earnings (April)
13:30 USD – US Non-Farm Payrolls (April)
13:30 USD – US unemployment Rate (April)
15:00 CAD – Canadian Ivey PMI (April)
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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