Summary:

• CADJPY is a big mover among major currencies, rising 1.5%
• Commodities suffer with silver down 3.5% and oil pulling back 2.4%
• Much-awaited NFP was mixed with solid employment gain and moderate wage growth

All 4 dollars in the G10 basket of major currencies were among the top5 performers, ranking 1,2,4 and 5, divided only by the Swedish krone. The US dollar did well against the yen as the NFP report led to another increase in government bond yields but it was the Canadian dollar that was a true star, backed by amazing set of the data. Meanwhile commodity prices plunged with silver down as much as 3.5% and oil declining by 2.5%.

Friday was an interesting day on financial markets as it started with a massive drop in silver prices. Prices tumbled by some 11% and then recovered immediately as a result of what is believed to be “fat finger” that is a large trading error. Finger or not, it was not a good day for precious metals – silver declined by 3.5% eventually as gold slid by 1.1% and platinum flirted with lows below $900/oz. It was mainly a result of rising yields of US Treasuries. 

Higher T-yields this week have been a result of better macroeconomic data. While today’s NFP was not all that stellar with wages missing expectations again, overall the data mix was very solid with both ISMs much above expectations. That package will reduce pressure on J.Yellen when she delivers her semmi-annual testimony next week. USDJPY has seen a major surge today not only as a result of better US data but also as a consequence of increased bond purchases in Japan. 

While the US dollar caps a solid week, it was the CAD that was a true star today. The currency has gained some 0.83% against the greenback and around 1.5% against the yen on the back of stellar NFP report and very decent PMI. Strong Canadian data increase odds of interest rate hike next week so CAD is certainly the currency to watch. 

Meanwhile the pound has been on the reverse as industrial output missed expectations by a significant margin suggesting that perhaps the economy is not ready yet for interest rate hike. The pound has been the second weakest G10 currency today, down 0.66% on the greenback.

Equity markets have been fairly stable as oil tumbled by 2.4% again on concerns that OPEC is not ready to counter increasing output from Nigeria and Libya. US rig count saw an increase of 7 for oil showing that the shale sector is yet to retreat despite these lower prices. 

Next week could be huge for USDCAD as we have two major events on the same day, at the same time: BoC will announce its decision on rates just when Fed’s Yellen will take the stage on Wednesday 3pm BST. Better stay alert!