• US June non-farm payrolls +209K vs +225K expected
• Canada June employment change 59.9K vs 20.0K expected
• Fed’s Goolsbee: I feel like we’re on the golden path to ’no recession and low inflation
• Air travel rebounds: Passengers at 69.1% of pre-pandemic levels
• EIA weekly US natural gas inventories 72 bcf vs 64 bcf expected
• Canada June Ivey PMI 53.4 vs 53.5 prior
• Timiraos: June jobs report keeps the Fed on track for July hike

Markets:

• Gold up $13 to $1924
• WTI crude oil up $1.86 to $73.66
• US 10-year yields up 2.3 bps to 4.06%
• S&P 500 down 0.2%
• JPY leads, USD lags

The initial reaction to the non-farm payrolls report was mixed as the softer headline competed with higher-than-anticipated wage growth. The dollar fell, then recovered most of the losses.

From there, the bond market took over. Yields began to fell and 2s fell back through 5%, kicking off a strong decline in the US dollar. The USD/JPY selling today was particularly notable and certainly raised some eyebrows regarding whatever the MOF or BOJ is going to deliver, but it could also be profit taking.

The pound and euro were also particularly perky as bot added around 90 pips from early New York levels. Cable tried the June high and matched it to the pip but couldn’t get through and gave a handful of pips back late.

The commodity currencies doubly benefited from stronger commodity prices and better risk appetite, putting up some strong gains. The loonie trailed its mates despite another strong jobs headline. One of the reasons might be the softer wage growth in the employment report. Next week’s Bank of Canada decision is going to be a big one with the implied probability of a hike at 67%.

Have a great weekend.

This article was written by Adam Button at www.forexlive.com.

The major indices gave up gains into the close with all the major indices closing lower on the day.

At session highs the

• Dow was up 114.11 points
• S&P was up 28.29 points, and the
• she NASDAQ index was up 125.47 points.

At the close, the indices were all negative.

• Dow industrial average -187.25 points or -0.55% at 33735.00
• S&P index -12.59 points or -0.29% at 4399.01
• NASDAQ and -18.34 points or -0.13% at 13660.71

The small-cap Russell 2000 did close higher with a gain of 22.43 or up 1.22% at 1864.66.

For the trading week:

• Dow Industrial Average fell -1.36%
• S&P index fell -1.16%
• NASDAQ and the fell -0.92%

The Russell 2000 fell -1.27%.

This article was written by Greg Michalowski at www.forexlive.com.

Global air travel is perhaps the single-best indicator of covid impacts and the latest data shows that we’re on the cusp of a full retracement.

The May report from IATA shows that passenger-kilometers are at 96.1% of the pre-pandemic level, which is up 39.1% year-over-year. I strongly suspect the job is completed in June or July.

What’s notable is the skew in traffic and the risks later. Domestic air travel is above pre-covid levels for the second month but international travel is still down 9.2%. Some of that is the slower return of Asian customers and covid concerns when booking vacations but there’s also an element of business travel that’s missing.

The rise of remote work has curbed business travel demand and right now that’s being replaced by revenge travel post-pandemic. In time, the demand for travel might be satiated and that will result in travel settling out at lower levels, or at least a lower trajectory than pre-pandemic. Hotels are facing the same question but for now, a return to the office and international business travel has some momentum.

This article was written by Adam Button at www.forexlive.com.

The pound has extended today’s day to 100 pips, touching 1.2848 in a late-week push. As the 4-hour chart above shows, buyers ran into the June high of 1.2848 exactly before backing off a few pips. The bulls may try to make another push late or in low liquidity at the Monday open in an attempt at a fresh 15-month high.

The pound is benefiting from a hawkish Bank of England and high inflation. I think ultimately this will prove to be playing with fire as some kind of accident happens if/when rates get to 6%. But for now it’s all about yield differentials and US dollar selling.

Some stops were already hit as 1.2800 gave way but with some real resistance above, the shorts have a good argument here.

Overall though, the US dollar is being sold hard in anticipation of next week’s CPI report. I also have to wonder if there are fears of Japanese intervention or a change from the BOJ as a factor.

This article was written by Adam Button at www.forexlive.com.

The price of WTI crude oil futures settled at $73.86. That’s up $2.06 or 2.87%. The gain equaled the gain from July 5 which is the largest gain since June 15. The low price reached $71.19. The high price was at $73.91. The lower US dollar has contributed to the rise.

Technically, the move to the upside has the price testing it’s 100-day moving average currently at $73.86. The last time the price tested that moving average was back on May 1 and April 28. The price closed just above the moving average on April 28 but rotated lower the next day.

Next week, traders will need to decide whether to break above that key 100 day moving average moving average and look toward the 200-day moving average up at $77.47 (the last time the price tested that moving average back on April 13 when sellers leaned), OR use the moving average level to push price back to the downside?

For now, the momentum to the upside has reached its target. The buyers and sellers will now battle it out for control.

Fundamentally, Reuters reports that Russia still plans to cut oil exports in August due to domestic gasoline demand, but it’s unlikely to reduce output. Also, the Baker Hughes US Rig Count for the week ending July 7th reported oil rigs were down by 5 at 540, while natural gas rigs saw the biggest increase in six years, up 11 to 135, bringing the total rig count to 680.

For the trading week, the price of crude oil rose 4.53%. That’s the largest increase since the week of April 3.

This article was written by Greg Michalowski at www.forexlive.com.