NFP Prints +211k; Focus Moves to Fed-Speak, French Elections

2017-05-05 13:30:00 James Stanley

Talking Points:

- April NFP Printed at +211k versus an expectation of +190k, while March was revised lower by -19k to a revised total of -79k. Below, we look at updated price action in both EUR/USD and USD/JPY.

- The week is far from over as a series of Fed-speakers on the calendar for later today could provide a healthy dose of volatility to markets; and after this week’s close, French elections are on the calendar, and this carries considerable gap risk for markets, especially those carrying Euro-exposure.

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April’s Non-Farm payrolls were released at 8:30 AM ET this morning, and the headline number printed at +211k versus the expectation of +190k and the prior print of +98k. That prior print was revised-down by -19k jobs to give March a revised total of +79k; but the attention grabbing aspect of this morning’s report was a reduction in the unemployment rate to 4.4%, which would be the lowest read since 2007.

The immediate-response was mixed, as the Dollar strengthened against the Yen but weakened against the Euro. In the minutes since that initial-pop, Dollar weakness took over as attention averted to a series of Fed-speakers slated to speak later in the day. Stanley Fischer is at 11:30, John Williams is at 12:45, and at 1:30 we hear from Janet Yellen, James Bullard, Charlie Evans and Eric Rosengren. So, today is far from over.

DXY touched-down to a fresh five month low as the report was filtering into markets.

Chart prepared by James Stanley

Going along with that Dollar-weakness was a new intermediate-term high in EUR/USD as the pair marched towards the 1.1000 psychological level. There’s a healthy dose of risk here going into the weekend with the second round of French elections. While many are appearing to be pricing-in a Macron-win, there are a considerable number of undecideds in many of those poll numbers; and if recent history has taught us anything, it’s to keep on open mind around political polls with a large number of respondents reporting as undecided.

Chart prepared by James Stanley

One pertinent takeaway from this morning’s report is the response of Yen weakness. On the initial release of NFP, USD/JPY popped-higher after which USD-weakness began to take over. But buyers stepped-in fairly quickly to bid prices-higher.