The key event today was the NFP report for April. The data was mixed as employment rose higher than expected but wages grew in slower pace. It’s mean that FED will likely hike rates at its meeting in June but it’s not enough to support the US dollar. Meanwhile, in Europe, stock indices jumped once again believing in Macron’s victory in the final round of French election scheduled on Sunday.
The main economic release of the week saw a strong NFP report all round which could be seen as improving the chances of a June rate hike from the Fed. The US April jobs reports showed non-farm payrolls at 211k and the unemployment rate at 4.4%. Real disappointment was the annual rate of wage growth which declined to 2.5%. The data is in line with FED’s gradual pace of tightening that traders have already priced in. If the dollar is to recover somewhat, the market has to believe that the Federal Reserve could tighten more than expected. In the aftermaths EURUSD hovers around 1.10 handle.
The European indices moved higher Friday as the latest development in French politics puts Macron within closer reach of the keys to the Elysee Palace in the final day of campaigning. Prosecutors in Paris opened an investigation into election hacking Thursday after Macron filed complaints over online rumours that claimed that he had a secret Caribbean bank account.
Overnight, oil dropped by more than $1 in a matter of minutes in Asian trade. The short-term move came after the commodity has broken below an important level of support and below a lower bound of the long-term upward channel. During the day oil prices recovered some of their losses but still they’ve remained under pressures as the OPEC’s deal is not as fruitful as expected and the US production is on the rise (Baker Hughes report showed increase in drilling to 703 active rigs).
Stateside, the U.S. House of Representatives handed Republican President Donald Trump a victory after voting to undo major parts of his predecessor Barack Obama’s health-care bill. The plans now head for a vote in the Senate.
Next week the US CPI and retail sales data come into focus. Moreover, the Bank of England and New Zealand’s RBNZ will decide on interest rates and other issues connected with monetary policy.