CAD and USD Quiet To Start June

Friday, June 1, 2018

Despite growing trade tensions with the United States the Loonie is trading sideways to close the week. Manufacturing PMI data was the lone economic release and was another expansionary number of 56.2. Markets will be watching commodity prices and further political developments over the weekend for CAD movement. There are no important Canadian releases until Tuesday’s labor productivity data.

The USD is surprisingly quiet after very strong job numbers this morning. Non-farm employment rose by 223k (189k estimate) driving the overall unemployment rate down to a record low of 3.8%. Hourly earnings also rose 0.3% and the ISM Manufacturing PMI was 58.7 versus expectations of 0.2% and 58.3, respectively. This continuing positive economic data seems to solidify another US Federal Reserve interest rate increase at the Wednesday June 13 meeting.

The Euro is also quiet this Friday despite ongoing political risk. Europe Spanish Prime Minister Rajoy was forced out after a parliamentary vote of no confidence. Socialist party leader Pedro Sanchez has now taken office. This is only days after Italy scrambled to form a Government.

Equities are up this morning: the Dow is up 0.84%, the S&P up 0.88%, NASDAQ up 1.05%, and the TSX nearly flat at +0.06%.  Crude Oil is down 0.67% ($66.61) and Gold is down 0.48% ($1,298.40).

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