Dollar and Gold Expectations into NFP

Good morning,

 

- Crude Oil, Gold Prices Look Ahead to US Jobs Data for Direction.

- Philip Lowe will replace Glenn Stevens as #RBA Governor, according to AFR.

- US Dollar Falls, Commodity Currencies Rise as Payrolls Data Looms.

- Hong Kong said to crack down on illegal money flows from China.

- Fed's Kashkari: Our base case it not for a recession this year. Outlook is for continued moderate economic growth. U.S. productivity has really slowed down. Want to normalize when the economy can sustain it. Fed will move when the data allows it.

- Following yesterday’s lead, USD strength has continued to dominate the forex trading landscape into this morning.

Traders shrugged off a notoriously unreliable March private payrolls miss, with the USD momentum unable to be halted on the unreliable and lagging release. The ADP report showed an increase of 156K jobs, missing the market’s 195K expectation. While this opens the door for a possibly weak Non Farm Payrolls number on Friday night, nothing really changes until markets see that number itself.

My thinking around the release is that we might see some pricing-in of a poor NFP number with some USD selling as we head into Friday, but with that coming the possibility of any positive number causing a shock jerk to the upside. This is why I’m nervous about AUD/USD shorts on the back of the RBA cut on Tuesday. USD is still king and this directional risk assessment is just about the most important factor to consider while taking positions into and around the NFP release.

-One of the big benefactors in the recent surge of USD buyers has been USD/CAD. Loonie weakness was exaggerated following last night’s worst ever (wow) trade deficit. With the Canadian Dollar higher than the BoC would ideally like to see it and longer term oil prices still weak, exports were obliterated…

Speaking of the importance of Oil to the Canadian Dollar, it also seems we can’t include one chart without the other. Therefore, when you trade USD/CAD, always take seriously into consideration Oil Charts. The correlation of ‘Loonie’ to Oil, remains extremely highly positive…to put it briefly, it’s roughly like trading crude oil, when you trade USD/CAD. Read between the lines and make profits..USD/CAD climbed to 1.50 when Oil tumbled to..26-27 USD$...but then ‘Loonie’ surged while oil surpassed 40 area, dragging down the USD/CAD below 1.30. Do your own research.

-Is The SPX500 Dipping Before the Eventual Rip?

- Best/worst performers in Commodities today: NGAS: 3.1%, USOil: 0.1%, XPDUSD: -1.5%, Copper: -1.6%.

- Japanese PM Abe says will act if necessary to curb a strong Yen. All the Japanese policy makers should set this saying as their ring tone.

- While market 'fear' may seem low with the $VIX deflated, look at the interest behind the haven product. Surging!!

- Significant move from the Turkish Lira.

- The recent recovery on the US dollar seems to be on pause for now as traders begin to look towards tomorrow’s Non-farm Payrolls report. The key levels that were broken during the dollar sell-off are being tested again in the dollar recovery, but traders will be questioning whether this is the extent of the rebound already. Wall Street closed mildly lower again yesterday as it followed European markets lower, whilst Asian markets have been also mildly weaker overnight after the Caixin China services PMI missed expectations. European markets have though found some support in the early moves today, helped by the bounce in oil. After being hit yesterday afternoon by slightly higher than expected EIA oil inventories, the oil price has rallied once more on the news that the Canadian wildfires are disrupting output from Canadian oil sands production.

- Major news for today: USD Unemployment Claims, GBP Services PMI, AUD RBA Statement Policy, FOMC Bullard Speaks, CAD Building Permits.