Market Commentary: Friday 3rd May

Overnight we have seen Apple shares and the Yen rally. The yen touched a three-week high (152.75) against the dollar and is heading for its best week since December 2022. The estimates indicate that the Japanese MoF have spent more than $20 billion in its latest round of intervention. These are the largest volume days for platforms such as EBS since November 2016 and as we know with intervention policies the biggest winner is often not the Central Bank - the SNB and BoE are immediate examples that spring to mind.

As for the day ahead, we have employment reports out of Spain and Italy, central bank reserves for the UK and then it’s over to the USA for the highlight of the day: the April non-farm payrolls report. Payrolls are expected to grow by 250k, while the unemployment rate remains steady at 3.8% and participation is unchanged at 62.7%. Average hourly earnings is expected to moderate to 4% on a YoY basis. As a few regular readers will know we enjoy GS's research and they estimate nonfarm payrolls rose by 275k in April—somewhat above consensus of +241k and this is mainly due to their layoff tracker indicating that the pace of layoffs remains low. They also hint that Average Hourly earnings will increase as there is 5bp boost from minimum wage hikes for California fast food workers.

Marketwise the yield on 10-year Treasuries declined five basis points to 4.58%, West Texas Intermediate crude rose 0.3% to $79.15 a barrel, Spot gold rose 0.1% to $2,307.21 an ounce, Bitcoin rose 1.5% to $59,604.16, Ether rose 0.6% to $3,004.02. Cable opens at 1.2550 and USDJPY is at 153.10. Finally on the speaking front we hear from Goolsbee, Williams and Cook from the Fed.

We wish you a pleasant Bank holiday weekend and hope the weather improves....

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