01/04 – All eyes on US jobs numbers today and tomorrow

GBP: PMI due at 09.30

EUR: Needs to find its level

USD: Jobless claims today and payrolls tomorrow

Sterling

Markets seem pretty happy to hold off on major moves at the moment ahead of a long weekend and the latest US jobs numbers released both today and tomorrow. Sterling for its part is holding up well against a recalcitrant USD with wider attempts to move higher against the single currency also bearing some fruit.

The key for sterling’s strength in Q1 was the vaccination program and the timetable for reopening. It will be the same in Q2 and any delays to the program of opening pubs, bars, restaurants, and shopping centres will be a blow to the market’s confidence in sterling. Updates from the government are due on April 5th, May 10th, and June 14th ahead of changes a week later from those dates.

Euro

With a new four-week lockdown hitting France from Saturday there is little wonder that the euro cannot find a bid at the moment. The decision by the Macron government to essentially shutter the country for a month – including schools going into the Easter holidays – has highlighted the disparity in progress against the virus between France and the US/UK.

Such a disparity will continue to weigh on the single currency moving forward and we must therefore wait to see where investors believe the right price to start buying the euro exists. It could be a further 2% lower than where things are currently trading in EURUSD terms; a move that would obviously have wider knock-on effects for GBPUSD and GBPEUR.

Inflation data yesterday also failed to haul the euro higher; without data or vaccine support there is little reason to hold the single currency if you don’t need to.

US dollar

The announcement of the Biden stimulus plan added little at the margin to the ongoing story of the US dollar but it certainly helped risk sentiment in wider markets with stocks rising in US trade and finishing squarely in the green.

While speeches and pledges are all well and good for primetime tv and opinion polls, the near-term movement of the US dollar depends a lot more on jobs news due today and tomorrow from the States. Today’s initial jobless claims figures and tomorrow’s payrolls announcement will be able to highlight whether improvements in the US labour market is a blip or the beginning of a trend.

Expectations are all over the place however with predictions varying from 232,000 jobs being added to a million being created. Good data is good for the US dollar so, if you are looking for ongoing USD strength, any number above the consensus view of 660,000 should be just fine.

Elsewhere

It’s PMI day globally so we’ll hear from manufacturing sectors around the world as to their confidence in the world economy, supply chains, employment, prices and end customer demand. China’s was weaker overnight hurting the AUD while Japan’s Tankan surprised to the high-side. Italy’s is due at 8.45, France’s at 8.50, with Germany at 8.55, the Eurozone aggregate at 9.00 and the UK’s at 09.30 (all times BST).

As it is Good Friday tomorrow and a bank holiday in the UK on Monday your next morning report will be with you on Tuesday April 6th.

Market rates

Today’s interbank rates at 08:21 against sterling. Movement vs yesterday.

Euro€1.173 ↑
US dollar$1.376 ↑
Australian dollar$1.823 ↓
South African randR20.32 ↓
Japanese yen¥152.3 ↑

Have a great day and a better, long weekend.

Thanks for subscribing to our market reports!

You've been added to our Chief Economist's mailing list for his morning reports.

Share:
Jeremy Thomson-Cook

Jeremy Thomson-Cook

Jeremy has over 13 years experience working in the FX industry. As a specialist in political risk mitigation and currency hedging, he regularly advises clients on the day-to-day moves of the markets and the implications of fiscal and monetary policy on international businesses.