Main currency pairs little changed
The main currency pairs are little changed from last Thursday morning, with EURUSD and GBPUSD trading at around $1.1540 and $1.3240 respectively and EURGBP still hovering just above the £0.87 level. Markets generally may tread water today ahead of tonight’s Trump-imposed deadline for Iran to reopen the Strait of Hormuz. Economic data of note this week include the March CPI report in the US on Friday, which is expected to show the impact of higher energy prices on headline inflation.
The US was open for business yesterday. Equity markets ended with modest gains of around half a percent of so, while government bond yields were unchanged to very marginally lower on the day. Meanwhile, oil prices are edging higher this morning ahead of the Trump deadline with Brent crude just north of $111 p/b.
The US economy added 178k jobs in March according to last Friday’s payrolls report, well ahead of the consensus forecast for a gain of just 65k, though February’s outturn was revised lower to show a decline of 133k (from -92k previously). The unemployment rate edged down to 4.3% from 4.4% in February, while the annual rate of growth in hourly earnings eased to 3.5% (from 3.8%), the slowest pace of increase in almost five years.
ECB member Sleijpen says interest rates will “either stay the same, or go up” at the April 30th monetary policy meeting. The market currently sees a bit more than a 50% chance of a 25bps hike this month, with almost 75bps of hikes in total priced in for this year.
Looking to the week ahead, as well as the CPI report on Friday, other US data include PCE inflation and consumer spending (both for February) on Thursday and the University of Michigan consumer confidence/inflation expectations survey (for April) on Friday. Euro area data include producer prices and retail sales (both for February) on Wednesday. On the central bank front, the Fed publishes the meetings of its March monetary policy meeting tomorrow (Wednesday).