All eyes on US and Canada labour market data after underwhelming April reports

The DXY index ends the week only slightly higher after falling to January lows on Tuesday and Wednesday despite economic events being sparse throughout the week. Several comments from Federal Reserve members pointed to a slight hawkish shift in the central bank’s overall tone, but markets didn’t deem this established enough for it to spill over into fixed income pricing. Meanwhile, hawks from the European Central Bank have kept quiet regarding policy tightening recently, signalling to markets that the ECB may take its time to reduce purchases via the QE programme. For the Bank of England, MPC member Gertjan Vlieghe stated that an earlier-than-expected rate hike is possible, which helped sterling stabilise this week despite the BoE’s CHAPS data showing hesitant consumer mobility. Next week, the focus turns to labour market data from the US and Canada after April’s underwhelming reports.

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