Non-farm payroll fuelled traders to bet on a stronger dollar after the BLS reported another month of solid job creation in March. Although the print came in at 431k vs 490k expected, unemployment in the U.S is back to pre-pandemic levels at 3.6% adding to speculation that the Fed might move forward with more aggressive rate hikes.
Money markets had little movement over the course of Friday with cable rebounding off recent lows trading at 1.311 and the eurodollar slightly lower at 1.1050. In Europe, CPI figures came above expectations at 7.5% vs 6.6% forecast. President Lagarde uttered the same message to the markets that “you will see higher inflation this year, there is no question about that” whilst also re-affirming that Europe can avoid stagflation which is becoming more unlikely with Russia-Ukraine tensions.
Pound-euro is trading above the year low, fuelled by strong GDP figures recorded in the Uk Q4 of 2021. Price is holding onto the 1.18 handle. Later on this morning, Gov Andrew Bailey speaks on the state of monetary policy giving room for more speculation on the BoE’s rate hike plans.