Expert Analysis of Today's Market

• The dollar fell against most major currencies on Thursday as investors positioned their portfolios for tomorrow’s job report. Sterling fell after the Bank of England kept interest rates unchanged today. The Canadian dollar rose to its highest since December on surging job growth in March, boosting speculation the Bank of Canada will raise interest rates this year.


• The EUR/USD reached a 2-year high as signs of faster growth in Europe raised speculation the European Central Bank will raise interest rates while the Federal Reserve will hold rates steady. The EUR/USD broke critical resistance and our stop at 1.3435. We will sell one and buy one unit of the pair at 8:20 AM tomorrow. We will have 50-pip stops on both positions as we think there could be a big move in either direction.

Financial and Economic News and Comments

US & Canada

• Canada added 54,900 jobs in March, 5 times what economists forecast. Canada’s jobless rate stayed at a 3- decade low of 6.1%, Statistics Canada reported.


• US initial jobless claims rose more than expected by 11,000 in the week ended March 31 to 321,000, the US Labor Department said. The 4-week moving average fell to 315,750 from 317,250.


• The Chicago Fed Midwest manufacturing index rose 0.9% in February to a seasonally adjusted level of 103.7, after January’s revised 1.9% drop to 102.8, the Federal Reserve Bank of Chicago said.

Europe

• The Bank of England, as expected, left its official bank rate at 5.25% Thursday, following a 2-day monthly meeting of its Monetary Policy Committee.


• Germany’s industrial production unexpectedly rose for a fourth straight month in February. Production increased a seasonally adjusted 0.9% m/m in February after January’s 0.9% m/m rise, the Economy and Technology Ministry in Berlin said. For the year, industrial output rose 7.7% y/y.


• UK house-price inflation accelerated to the highest rate since February 2005. UK house prices in Q1 rose 11.1% from the same period a year earlier to an average £194,362 ($384,000), the UK’s biggest mortgage lender HBOS said.

Asia-Pacific

• The People’s Bank of China will raise the reserve requirement ratio for banks by half a percentage point, its third increase this year, the PBC said. The increase will take effect April 16 and raise the ratio for most commercial banks to 10.5%. The PBC said it will maintain a prudent monetary policy and “use various tools to strengthen management of liquidity in the banking system, maintain liquidity around suitable levels, and prevent overly rapid growth of credit.”


• Bank of Japan Deputy Governor Toshiro Muto said the BOJ will gradually adjust interest rates even though it can still maintain very low rates for a while. “We don’t have any time frame for future rate hikes. Our future policy adjustments will be based on economic and market moves,” Muto said.