The USD is flat, oil prices weaken, equity markets are up, and US yields are mixed ahead of the key payrolls report. The USD index holds steady near 3-1/2 year lows as investors await the US payroll report. The pound edges higher after UK PM Starmer's office backs finance minister Reeves, following rumours that she would be dismissed over investor concerns about the UK's finances. US treasuries rose after heavy selling on Wednesday, when concerns about the UK's fiscal position dragged global bond markets lower. Global equity markets advanced cautiously heading into today's US Nonfarm Payrolls. US futures firmed on the back of another record high for the S&P 500, with the US equity markets set to close at 1 pm ahead of the 4th of July holiday. Today's US Nonfarm Payrolls are expected to show slower hiring and the highest unemployment rate since 2021. A weak report may boost the prospect of a Fed easing and support equity markets. Investors will also be closely monitoring House Republicans as they work to secure support for Trump's massive tax and spending package, which is set to proceed to a final vote. In focus today, the ECB monetary policy meeting accounts, US Average hourly earnings, labour force participation rate, Nonfarm Payrolls, initial jobless claims, unemployment rate, and the S&P Global Composite and Services PMI will help drive intraday currency market direction.
In other news. Eurozone services sector returned to modest growth in June, according to the PMI. UK borrowing costs fall as the PM backs finance minister Reeves. Eurozone services sector returned to modest growth in June, PMI shows. US-Vietnam deal risks China reprisal, Bloomberg Economics says. Carney meets with automakers as Canada's factories show strain from tariffs. House Republicans clear critical hurdle in Trump tax bill debate. As the trade war truce with China holds, the US lifts curbs for chip design software and ethane. The US and India push for a trade pact after Trump strikes a deal with Vietnam, sources say. Rio Tinto-backed aluminum firm to invest $1.1 billion in Canada project.
In currency markets. Currency markets remain steady as investors await the key US jobs data ahead of the July 4th holiday on Friday. CNY & Asian currencies on average are flat against the USD. Trading currencies are mixed, with JPY, NZD and SEK weakening 0.3%, NOK fell 0.2%, AUD, CHF & CZK down 0.1%, MXN & CZK flat, and ZAR strengthening 0.3% against the USD.
In commodity markets. Oil prices weakened 0.8%. Natural Gas prices rallied 1.1%. Gold and Copper prices fell 0.1%. Silver prices strengthened by 0.9%. Wheat prices up 0.1% and Soybean prices rose by 0.4%.
CAD steadies below 1.3600 as the USD continues to come under pressure amid a weakening labour market and increasing concerns about the US fiscal health as Trump's tax bill approaches its final hurdle in the House. Canada's ambassador to the US , Hillman, said on Tuesday that she remains confident that US President Trump will lift all tariffs on Canadian goods as part of an economic and security deal, Prime Minister Carney hopes to secure by the July 21st deadline. With the prospect of a trade deal, and the USD remaining on the back foot, CAD has room to retest 1.3425, if we see a break of 1.3530.
EURCAD holds steady, with investors sidelined ahead of key jobs data and the July 4th holiday.
EUR holds steady near multi-year highs heading into key US jobs reports. The euro remains subdued, hovering around 1.1800, as investors remain cautious ahead of today's US Jobs report, following the ADP Employment Change's first decline in more than two years in June. Elsewhere, ECB policymaker Wunsch said on Wednesday that "I am uncomfortable with the market's interest rate expectations." "There is an argument for providing a mildly supportive policy stance." Intraday, the jobs data will be the primary driver, and a weaker number will support the euro as weaker data would support a Fed rate cut.
GBPEUR edges higher in early trading as the pound attempts to recover after Wednesday's sell-off following concerns about the future of Finance Minister Reeves.
GBP steadies after Wednesday's sell-off as PM Starmer throws his support behind Finance Minister Reeves. Global bond investors reacted quickly after the UK Prime Minister failed to back Chancellor Reeves in Parliament, which caused the 30-year gilt yields to surge, resulting in a 1% decline in the GBP. We expect the pound to stagnate at its current levels as investors remain sidelined ahead of critical US jobs reports.
Payments International Inc., payment and foreign currency exchange services are provided by Ebury Partners Canada Limited. Payments International Inc. is partnered with Ebury Partners Canada Limited as a Programme Manager. "Ebury Partners Canada is registered as Money Services Business (“MSB”) with the Financial Transactions and Reports Analysis Centre (“FINTRAC”) (Reg. No.: M17949017) and licensed as an MSB with the Authorité des Marchés Financiers (“AMF”) (Licence No. 904066)".
