Investors hit the sell button going into the weekend after a rosy US non-farm payrolls report that saw the United States add 390k jobs in May. That was above the 325k economists expected, according to a Bloomberg survey. The report fueled already strong Federal Reserve rate hike bets. Overnight index swaps are pricing in 50-basis point hikes at the Fed’s next two meetings, and an 84% chance for a 50 bps hike at its September meeting. The US Dollar[1] halted its two-week losing streak, rising nearly half a percent on the week. Equities responded in kind to those firmed up bets, with the Dow Jones Industrial Average[2] shedding around 1%.
The Canadian Dollar[3] gained ground for a third week versus the Greenback, inspired by strong oil[4] prices and the Bank of Canada’s aggressive outlook on rate hiking. Analysts have turned largely bullish on the Loonie--per a recent Reuters poll, with CAD expected to gain 0.4% versus USD[5] over the next three months. Canada is set to report April trade data and jobs numbers for May in the week ahead, which may give rise to some volatile price swings in USD/CAD[6].
Oil[7] prices—across the WTI and Brent benchmarks—rose despite a move by OPEC and its allies to increase production by 648k barrels per day in July and August. That, however, failed to assuage supply fears across the energy market. Those supply concerns were bolsters after the United States reported a larger-than-expected inventory draw. The EIA said crude inventories fell by 5.07 million barrels for the week ending May 27, well over analysts’ expectations of around -1 million barrels.
Elsewhere, copper prices[8] in New York recorded the
