The biggest story on Thursday was the rise of the euro which has surged to a high of 1.0987. The euro is currently supported by expectations of a Macron win in the final round of French elections this Sunday. While we bear in mind that if Le Pen surprises on Sunday, the market’s reaction would be far greater, the most likely scenario is however a victory of the pro-euro candidate Emmanuel Macron. Markets are therefore unlikely to budge much if Macron wins.
Apart from the French election, great attention will be paid to the Non-Farm Payrolls report which appears to be the market-moving event for this week. The U.S. Jobs report is forecast to show a job growth of 190K jobs last month but the focus will also be on Average Hourly earnings. A large miss in this key figure or a disappointment in payrolls growth may raise doubts about a Fed June rate hike. In other words, a disappointment would have a greater impact on the market than a strong report. In case of a weaker jobs report the U.S. dollar could come under strong selling pressure.
The NFP report is due at 12:30 UTC today.
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