Wages weighing on USD after this morning’s employment report. Although the economy added 35 thousand jobs over consensus expectations, average hourly earnings missed; up 0.2% on a monthly basis vs. expectations of 0.3%. A positive note from the annual reading which was revised higher to 2.8% seems largely overlooked by investors.

Despite the miss in wages, the nonfarm payroll report all but guarantees that the Fed will raise interest rates in next week’s meeting. They’ve prepared markets for it in the last few weeks, and with the probability near or at 100%, we think they’ve succeeded. The focus will then shift to the minutes of their meeting for questions about the shape of policy through the rest of the year. Can we expect two more hikes? Will the Trump administration guide their moves? All this and more next Wednesday.

Conversely, Canadian employment beat consensus and markets are loving it. Expectations for a 5,000 decline in February got a huge upside surprise with an expansion of 15,300 jobs and the jobless rate fell to two-year lows. CAD dropped 80 points against the greenback immediately following the release.

UK industrial production and manufacturing production both contracted in January. While the manufacturing figures for December were revised higher, the Office for National Statistics says this won’t impact the final GDP growth reading.

EURUSD:   Euro continues to gain as the post-ECB climb extends in the backdrop of disappointing wage growth in the US.

GBPUSD:  Sterling largely flat as mixed data leaves investors without strong direction on cable.

AUDUSD:  Aussie dollar higher, belying weight from weaker commodity prices amidst a weaker USD.

USDCAD:  Canadian dollar boosted by a surprise uptick in monthly employment.