Non-Farm Payroll beat expectation by showing -539k contraction in April comparing to -expectation of -620k and much better than upwardly revised -699k in March. Unemployment rate climbed to 8.9%, highest since Sep 1983 and was inline with expectation. Nevertheless, market sentiments are lifted by further evidence that pace of recession in US is starting to moderate.
Dollar is sharply lower after the release on improved risk appetite. Among the major currencies, Canadian dollar is on of the biggest winners against the greenback on the back of stronger than expected job report from Canada. In Apr, the Canadian economy unexpectedly added 36k jobs comparing to expectation of -50k. Unemployment rate was unchanged at 8.0% comparing to consensus of a rise to 8.3%. Also released from Canada, housing starts dropped to 117k in Apr. Released earlier, UK's output PPI increased +0.6% mom in April (consensus: +0.2%, March: +0.1%), the most in 10 months, as driven by rising tariff by the government and higher cost of petroleum.
On monthly basis, the reading eased to +1.2% from +2% in March but it's still higher than market expectation of +0.7%.As stated by the BOE yesterday, weakness in pound has created 'upward pressure' on inflation and the path for consumer price should remain volatile for the rest of the year. Core output PPI rose +2.4% yoy in April following a downwardly revised +3.2% gain a month ago while input PPI contracted -1% mom (consensus: +0.8%, March: +1%) and -5% yoy (consensus: -3.5%, March: -0.4%). In Germany, industrial production stayed flat in March from a month ago (consensus: -1.3%, March: --3.4%), after declining for 6 months. The data further indicated the manufacturing sector in the nation has stabilized. On annual basis, the gauge contracted -20.4% in March, also better than market expectation of -21.1% and a downwardly revised -21.3% a month ago.
Trade surplus widened slightly to 8.9b euros in March. Swiss unemployment rate climbed slightly from 3.3% to 3.4% in April. RBA stated in the quarterly monetary statement that the Australia's economy will shrink 1.25%in the 12 months through June before seeing a “gradual” recovery to +0.25% next fiscal year. This represented downward revisions of February's projections of 0.2% growth this fiscal year and 1.25% the year after. In BOJ's minutes for April's meeting, policymakers stated they will 'take additional measures to facilitate corporate financing' to help companies raise funds should economy gets worse. The central bank has kept interest rate unchanged at 0.1% since December 2008 and has been buying corporate debts and government bonds to revive the economy.