U.S. Weekly Jobless Claims were 231k for the week ending May 4th, above the 212k estimate and the highest reading since August of last year. Recent jobless claims spikes were to 228k in November, 225k in January and 222k in March. The 1-year range is 194k to 261k, for a mid of 228k. So while today’s report being 3k above the yearly mid may not sound like much, it is enough to be headline news. A jobless claims number above 261k will be a key signal of a major shift in U.S. labor conditions.
The dollar is trending lower today, down against 9/10 of the G10 pairs. The biggest declines are against the traditional commodity currencies, those with exposure to oil prices: -0.38% vs. AUD & SEK, -0.30% vs. NOK and -0.22% vs. CAD.
Oil is +3.78% since yesterday’s low at $78.92/barrel.
The U.S. dollar index is -0.18% after its 4-day rally from a low 104.522 was rejected by resistance at 105.50.
USD/JPY is unchanged today compared to yesterday’s close, the pair’s least volatile day since the lead-up to the BoJ’s intervention in late April. Since April 29th USD/JPY has traded to a high of 160.03 and 151.85 low. A 50% retracement from the high to low (favorite measure of Fibonacci regression practitioners) is at 155.94, a near perfect match of today’s 155.95 high. In times of high volatility traders tend to move away from subtle quant strategies and revert back to market technicals.
Tomorrow’s Consumer Sentiment is the week’s last significant economic report. Next week’s data releases feature PPI and CPI reports, key inflation readings.
