Fed Funds Futures Suggest Negative US Rates Ahead of the NFPs

Fed Funds Yields Turn Negative, US and Canada Jobs Reports Under the Radar

The dollar reversed and traded lower against all but one of the other G10 currencies on Thursday and during the Asian morning Friday. It gained only against JPY, while it underperformed the most versus AUD, NZD, and CAD in that order. The currencies that gained the least versus the greenback were EUR and CHF.

DJIA — Technical Outlook

As we can see from our 4-hour chart, the Dow Jones Industrial Average cash index continues to slowly grind higher, while balancing above a short-term tentative upside support line taken from the low of April 22 nd. In addition to the slight positivity, which we are seeing this morning, the price managed to form a new high for this week, breaking above the 24170 barrier. We will take a bullish approach, at least for the near term.

USD/CAD — Technical Outlook

Yesterday, after finding resistance near the 1.4173 barrier, USD/CAD moved sharply to the downside, falling below the psychological 1.4000 zone. This morning, the slide temporarily got held near the 1.3925 area. Given that USD/CAD had declined quickly in a short period of time, we may see a small retracement back up before another leg of selling. For now, we will stay somewhat bearish.

As for the Rest of Today’s Events

Besides the US and Canadian employment data, we also have Canada’s housing starts and building permits for April and March, respectively. Housing starts are expected to have declined to 110.0k from 195.2k previously, while building permits are forecast to have tumbled 20.0% mom after sliding 7.3%.

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