After a risk filled Thursday markets are enjoying a brief period of calm before today`s all important Non-Farm Employment changes and a host of USD data which will be the deciding factor for the future direction of the USD, equities and commodities as markets scrutinise the data in an attempt to re-position themselves in terms of the FEDS recent comments that a rate hike in June is on the table provided that the data allows for the hike.

The Non-Farm Employment change (NFP) and Average hourly Earnings are considered the most important figures as they are central to the FEDS two most import indicators of economic health-Employment and Inflation.

The NFP shows whether the labour market is recovering and by how much and should the figure, expected at 159K, have an upward surprise we would see the probability of a June rate hike increase and vice versa if the figure is worse than expected.

The same can be said for Earning, which if they come in higher than the expected 0.2%, will trigger confidence in the current US economy and increase the probability of a June hike, boosting the USD as markets view this figure as being pivotal to economic growth and inflation because as people earn more, they spend more and have a better outlook for the future.

Today’s key data is as follows:

GBP

  • Services PMI expected at 52.5

CAD

  • Trade Balance expected at -2.5B
  • Labour productivity expected at 0.4%
  • BOC Gov Poloz Speaks

USD

  • Average Hourly Earnings m/m expected at 0.2%
  • Non-Farm Employment Change (NFP) expected at 159K
  • Unemployment Rate expected at 4.9%
  • Trade Balance expected at -41.2B
  • ISM Non-Manufacturing PMI expected at 55.4
  • Factory Orders m/m expected at 1.8%