• Job openings at an all-time high
  • Aussie dollar lifted by RBA
  • Rising risks boost the yen
  • South Africa’s economy contracts

One of Fed Chair Janet Yellen’s favorite employment reports was released this morning. The job openings and labor turnover survey – or JOLTS report – showed that job openings came in at an all-time high in April, with an upward revision for March in tow. The number of people quitting their jobs remained unchanged, but with such a wide array of opportunities in sight we may see this number tick up in the coming months. While the report is over a month in hindsight, this should cushion the Fed’s outlook for after disappointing nonfarm payrolls last Friday. JOLTS takes a more nuanced look into the dynamics of the labor market, an increasingly important consideration as we are at or near full employment.

Near-term geopolitical fears are finally being realized in currency markets this morning. The Japanese yen gained overnight to touch a six-week high against the dollar. Investors are adjusting their positions ahead of the plethora of risk events on Thursday, chief amongst them the UK elections. USD/JPY fell below 110 – an important psychological barrier – and Citibank’s technical analysts note that if we break 109.00 that there is little in the way down to 107.80. For now, we’ve seen the pair stabilize in the mid 109s, but ahead of Thursday investor jitters will likely continue to live in Japanese yen trades.

Despite the flight from risk-on trades, we are seeing a higher Aussie dollar this morning. The Reserve Bank of Australia held interest rates at 1.5%, maintaining a neutral bias toward policy. Despite slowing economic growth, the RBA kept their view that the economy is set to accelerate as forecast. Brushing off weak growth, Governor Lowe kept a positive tone towards the long-term outlook. “Looking forward, economic growth is still expected to increase gradually over the next couple of years to a little above 3 per cent” he commented in the accompanying statement. Overall, the minutes bolstered AUD after a slight misstep following a wider than expected deficit in the current account figures.

South Africa’s economy entered into recession for the first time since 2009. Q1 growth unexpectedly contracted as both trade and manufacturing recorded negative growth rates. Investors were expecting a 0.9% expansion after the -0.3% decline in the last three months of the year, making the -0.7% decline all the more difficult to swallow. We’ve seen the rand decline as a result, adding fuel to the fire of an already dicey political situation on the domestic side.

EURUSD: Despite the surprise uptick in the US JOLTS report, we’re seeing a stronger euro this morning – likely reflecting investor positioning ahead of the ECB meeting Thursday.

GBPUSD: Sterling lower as polls show an increasingly narrow race ahead for Britain’s elections.

AUDUSD: Aussie dollar lifted with a rosy outlook from RBA Governor Lowe.

USDCAD: Canadian dollar largely flat against the USD, giving up overnight gains as the US JOLTS employment report beat expectations.

USDJPY: The yen is loving the risk-off moves ahead of the myriad events on Thursday (UK elections, ECB policy, and the Comey testimony).