Makro

TD Securities’ FX strategists Jayati Bharadwaj and Howard Du note that stronger United States (US) payrolls produced only a modest reaction in the US Dollar (USD), as markets focus more on inflation than labor data.

Nomura’s George Buckley and team argue that even a swift resolution to the US-Iran war and reopening of the Strait would not necessarily stop the European Central Bank (ECB) from raising rates in June.

Commerzbank’s Bernd Weidensteiner notes that United States (US) employment rose by 115,000 in April, beating expectations and signaling a recovery after prior weakness. The six‑month average of job gains is picking up again, supported by strong corporate profits and favorable financing conditions.

Scotiabank strategists Shaun Osborne and Eric Theoret report the Euro (EUR) is modestly higher versus the Dollar, supported by risk sentiment around the US/Iran conflict despite softer German trade data and slightly reduced ECB tightening expectations.

TD Securities strategists expect April United States (US) Consumer Price Index (CPI) to show firmer inflation, with core CPI seen at 0.38% m/m and 2.8% y/y, and headline at 0.56% m/m and 3.7% y/y.

The Pound Sterling (GBP) trades higher against its major currency peers, is up 0.43% around 1.3610 against the US Dollar (USD), during the European trading session on Friday.

Federal Reserve (Fed) Governor Stephen Miran said in an interview with Fox Business, released on Friday, that the central bank should cut interest rates, clarifying that the current policy is holding back the job market.

Nordea’s Chief Analyst Jan von Gerich argues that the European Central Bank remains focused on inflation risks despite softer sentiment data and downside growth risks.

EUR/CAD extends its gains for the third successive day, trading around 1.6040 during the European hours on Friday. The currency cross remains stronger as the Euro (EUR) remains firm against its major peers despite the decline in Germany’s industrial sector activity in March.

Deutsche Bank analysts point out that stronger US data and hawkish Federal Reserve commentary have pushed Treasury yields higher and supported the Dollar Index.

The GBP/USD pair trades 0.25% higher to near 1.3590 during the European trading session on Friday. The Cable reflects strength as the Pound Sterling (GBP) outperforms its major currency peers, except antipodeans, amid a revived risk-on rally.

The EUR/JPY cross gains traction to around 184.15 during the early European trading hours on Friday. The Euro (EUR) edges higher against the Japanese Yen (JPY) amid improved risk sentiment and hawkish signals from the European Central Bank (ECB).

The United States (US) Bureau of Labor Statistics (BLS) will release the Nonfarm Payrolls (NFP) data for April on Friday at 12:30 GMT.

MUFG’s Lloyd Chan expects today’s US nonfarm payrolls to pose upside risks for the US Dollar (USD), with labour indicators hinting at a stronger April print.