Following a positive session for risk on Thursday, helped along by dovish Fedspeak and another retreat in US yields, Asia has seen another quiet session. Most currencies trade flat vs the NY close, with FX continuing to lag equities in Asia hours. Data and headlines wise overnight, CNH inflation did little to move the market, while there was little else to report in terms of new macro developments.

Looking ahead, it is likely to be busier though, with NOK CPI and CAD employment the major points of note away from central bank speak in USD, EUR and SEK. In EM, TWD trade, MXN IP, PLN NBP minutes and BRL inflation are due.

RBC Capital Markets

Day ahead: The main data releases today include Germany industrial production, Norway CPI, and Canada employment report.

CAD: RBC economics is forecasting a 150K employment increase in March (cons. 100K), with re-openings in the GTA continuing into the month and government subsidies supporting rehiring. This means that gains in some of the hardest-hit sectors (retail, food/accommodation, and other services) should again be evident after sequential improvement in February (retail/wholesale was 122K of the 259K overall gain).

Hours worked have risen materially, namely +0.9% and +1.4% in the first two months of 2021, and while another rise is likely given the March jobs gain, it should be minimal. We expect the labour force to increase by about 90K alongside the employment gain, meaning that the drop in the unemployment rate from 8.2% to 7.9% is more modest than it otherwise would be. Heading into the data, USD/CAD has support at 1.2548 and 1.2502, with resistance at 1.2583 and 1.2647.


The euro continued to grind out to the topside without really gaining too much momentum. A close above 1.1900 was positive for the bulls last night above the 200 day moving average but as we walk in this morning we have come back slightly lower. Discussion here surrounds whether the good performance of the euro this week is due to position unwinds or anything more important, a fully priced in US recovery versus looking beyond what is currently a bleak assessment of the European situation. For now I think it’s unclear but based on price action alone coupled with very steady handed comments from Fed officials last night there’s still some ground to be gained for the euro. With a lack of real news flow though this week it doesn’t feel like involvement is particularly high at this point. Short term there would be a loss of momentum back below 1.1860 but whilst above look for a move through yesterday’s highs up to the 1.1970/90

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