Daily Market Update

All Eyes on Non-Farm Payrolls; Unemployment 

August 05, 2022

After falling during yesterday’s session, the U.S. dollar was mostly unchanged overnight.

Overview

Equity futures are slightly lower but lack a definitive move ahead of this morning’s much anticipated economic data. Non-farm payrolls are due out at 8:30 a.m. Economists expect that the U.S. economy added 250K jobs in July and the unemployment rate holding at 3.6%. We will also look for revisions to the previous prints. June’s 372K jobs beat estimates.

Overall, the greenback has given up ground over the past few weeks. An index of global equity prices is set for a third weekly advance, recovering from recent lows. The recovery in stock prices is fragile as central banks continue to act to get inflation under control. This morning’s data is likely to have a material effect on risk appetite.

The Federal Reserve’s Barkin is speaking at the time of writing, but all focus remains on the payroll data.

 

What to Watch Today…

  • Non-Farm Payrolls at 8:30 a.m.

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CAD

The Canadian dollar is a touch weaker against the greenback today but in largely familiar ranges.  Canada will release their jobs data at the same time as its American counterparts.  Economists expect that our northern neighbor added 15K net jobs in the month of July, up from a dismal negative 43K in June.  The unemployment rate is expected to come in at 5.0%, slightly higher than the 4.9% reading in June.  WTI crude is down 0.5%, putting modest pressure on the loonie.

 

AUD

After a decent rally yesterday following trade surplus data, the Aussie crashed back to earth overnight.  The Reserve Bank of Australia raised its forecasts for both inflation and wage growth.  They expect that employment will remain under 4.0% throughout 2024.

On the surface, these developments should be positive for the Aussie dollar as it makes the RBA more likely to continue its policy tightening.  Perhaps the Aussie’s losses are more of a correction after a pop higher in the previous session.  Commodity prices are a leg lower today, also making a case for a weaker Aussie.

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