Futures higher ahead of monthly employment data (LULU)

Evrard Martin
Juin 3, 2017

The euro was 0.5 percent higher against the dollar to $1.1265, after earlier rising to a seven-month peak of $1.1282. It was on track to eke out a gain of about 0.25 percent on the week.The euro was little changed at $1.1216 after losing 0.3 percent the previous day. The Institute for Supply Management said its barometer of USA factory activity edged up to 54.9 last month from 54.8 in April, while ADP reported private payrolls grew by 253,000 last month, beating analysts' median forecast of a 185,000 increase. The euro declined against the dollar on Thursday as the dollar rallied after a report showed that US economy created more private sector jobs than expected in May, bolstering expectations for an interest rate hike this month. The Aussie had shed 0.75 percent on Thursday to plumb a four-week low of $0.7372 after news of an unexpected drop in China's manufacturing activity.The New Zealand dollar was firm at $0.7063 after it was also hit by the lackluster Chinese numbers. The Canadian dollar weakened against its US counterpart on Thursday as prices of oil dipped and the dollar strengthened after encouraging USA economic data. The dollar strengthened after better-than-expected private sector, raising expectations for an interest rate rise and lifting the dollar.

AUD/USD is supported around 0.7368 levels and now trading at 0.7374 levels.

U.S. private employers stepped up hiring in May, signalling that the labour market was rapidly tightening amid a firming economy, which could encourage the Federal Reserve to raise interest rates later this month. It hit session high at 0.7388 and made session lows at 0.7374 levels.

US Treasury yields moved higher.

"While the claims report put a damper on what has been a pretty upbeat run for most of the recent labor market data, we still have a fairly favorable view of labor market conditions", said Daniel Silver, an economist at JPMorgan in NY. The Canadian dollar strengthened against its broadly weaker USA counterpart on Friday, recovering from an earlier two-week low as data showing a rise in Canada's exports offset the impact of slumping oil prices. The unemployment rate is forecast to be unchanged at a 10-year low of 4.4 per cent.

Dow Jones closed up by 0.63 percent, S&P 500 ended up 0.74 percent, Nasdaq finished the day up by 0.76 percent. He noted, however, that the Fed's plan to push rates higher repeatedly later this year now looks far from certain.

March and April data was revised to show 66,000 fewer jobs created than previously reported.

Brent oil tumbled below $50, heading for a second straight week of losses, on worries that President Donald Trump's decision to abandon a climate pact could spark more crude drilling in the United States, worsening a global glut.

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