NFP beats with 211K but wages only 2.5% y/y –

Better than expected jobs report: the US economy gained 211K jobs in April and the unemployment rate ticked down to 4.4% but that is down to a drop in the participation rate. Wages are up 0.3% m/m as expected but only 2.5% y/y. There were downwards revisions to both job gains and wages. The “real unemployment rate” is down to 8.6%.

The dollar began positively but is now sliding. The moves are not huge, but EUR/USD is edging closer to the magic number of 1.10.

All in all, this is not convincing enough.

NFP Analysis: Still lots of slack – lower chances of a rate hike

The US was expected to report a gain of around 195K jobs in April, after a poor 98K in March (before revisions). The unemployment rate was expected to tick up 4.6% and perhaps most importantly, wages carried expectations for a rise of 0.3% m/m and 2.7% y/y.

Markets were tense ahead of the publication. NFP Preview: did the Fed hint a positive outcome? Trading it with EUR/USD

April 2017 NFP Data (updated)

• Non-Farm Payrolls:  211K (exp. +195K,last 98K before revisions)
• Average Hourly Earnings 0.3% m/m, 2.5% y/y (exp. +0.3% m/m, 2.7% y/y, last month 0.2% m/m, 2.7% y/y)
• Revisions: -6K (-39K  last time).
• Participation Rate: 62.9% (63% last month )
• Unemployment Rate: 4.4% (exp.4.6%, last month 4.5%)
• Private Sector: 194K (ADP showed 177K).
• Real Unemployment Rate (U-6): 8.6% (previous: 8.9%).
• Employment to population ratio: 60.2% (previous: 60.1%)
• Average workweek: 34.4 (last month: 34.3).

NFP Currency Reaction – USD is down

• EUR/USD traded around 1.0960. Hopes for a Macron victory in the French elections certainly helped. The pair resumes its rises and edges closer to 1.10.
• GBP/USD traded around 1.2930. The advances of the Conservative Party in the local elections helped cable. Also, recent data was positive. The pair is up to 1.2950.
• USD/JPY was backing off the highs and was around 112.30 on talk about no more stimulus from the BOJ. Dollar/yen is stable around 112.35.
• USD/CAD was around 1.3775, rejected from resistance after oil prices stabilized. The black gold collapsed yesterday. This pair is stable and influenced by Canada’s weak jobs report.
• AUD/USD was just below 0.74. Here are 5 reasons for the fall of the Aussie. The pair recaptures the 0.74 level.

All in all, the dollar is weaker. 

More: EUR/USD: Four factors that shape the next move

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