Focus will turn to US non-farm payroll report today. Markets are expecting 400k job growth in April. Unemployment rate is expected to be unchanged at 3.6%. Average hourly earnings is expected to stay strong at 0.4% mom.
Looking at related data, ISM manufacturing employment dropped sharply from 56.3 to 50.9, barely in expansion. ISM services employment dropped from 54.0 to 49.5, back in contraction. ADP report showed only 247k private job growth. Four-week moving average of initial claims also ticked up from 178k to 188k.
The figures on wages growth would be the most important ones to watch. Fed Chairman Jerome Powell talked down the prospect of a 75bps rate hike earlier this week. But the markets seemed not buying into this rhetoric after second thoughts.
10-year yield rose 0.149 to close at 3.066 overnight, after hitting as high as 3.108. Recent up trend is still in force towards 3.248 long term resistance level (2018 high). The reaction to NFP from 10-year yield would provide the guide to Dollar’s next move, in particular against Yen.
