NZ Dollar Shrugs After Soft Jobs Report

The New Zealand dollar has steadied on Thursday, after a sharp decline of 1.5% a day earlier. NZD/USD is trading higher 0.08% on the day at 0.5890, at the time of writing.

Will Post-FOMC Jobs Report Move Dollar?

Friday will be a nonfarm payrolls day and investors expect the economy to have added 243k new job positions in April, keeping the unemployment rate steady at 3.8% and wage growth stable at 0.3% m/m.

AUD/USD Stabilizes After Taking a Tumble, Fed Next

The Australian dollar has steadied on Wednesday after sliding 1.4% a day earlier. AUD/USD is up 0.19%, trading at 0.6489 at the time of writing in the North American session.

ADP Hints at Another Strong NFP on Friday

The monthly ADP labour market report showed that America created 192K new jobs in April, above the forecasted 179K and following +208K in March (revised from 184K).

USD/JPY Calm Ahead of Fed Decision

The Federal Reserve meets later today and is widely expected to keep rates unchanged for a sixth straight time. The target range for the benchmark rate of 5.25% to 5.5% hasn’t changed since July and the Fed has shown that it is willing to prolong its “higher for longer” stance as long as is needed. Fed Chair Powell is expected to have a hawkish message for the market, which would likely provide the US dollar with a boost.

US: Manufacturing Slips Back into Contraction in April, But Price Pressures Pick Up

The manufacturing sector's flirtation with expansionary territory in March proved brief. The ISM Institute characterizes demand as " at the early stages of recovery" and focused on the fact that production continued to expand.

Worst of Both Worlds: Are the Risks of Stagflation Elevated? Part III

In the first installment of this series, we presented a simple framework to characterize stagflation and identified 13 instances in the United States since 1950. We briefly summarized past episodes of stagflation in the second installment. In this final report, we consider the risk of stagflation in the coming years.

First Cut by Fed is September at the Earliest

Current and expected risks warrant the FOMC holding off on the first cut until September and then carefully assessing lingering inflation risks as each subsequent step is taken. A low of 3.375% is expected for fed funds mid-2026, a modestly contractionary rate.

Happy Apple Day

Apple is due to report Q1 results today after the bell. Expectations are soft given that Apple’s Chinese business got a major hit in Q1 as competitors increased their market share against the giant Apple. The chances are that, the actual results won’t blow anybody’s mind.

Powell Did Not Shake Markets

In the US, the Fed left interest rates unchanged as was widely expected amongst market participants. In its press release, the FOMC announced that from June onwards it will reduce its monthly quantitative tightening (QT) programme for US Treasuries to USD25bn from the previous USD60bn a month. It left its cap on reducing its holdings of Mortgage-Backed Securities unchanged at USD35bn a month.