April 2017 in Review
By Juan Pablo | May 2, 2017
April began with the highly-anticipated U.S. Employment situation report on Friday, April 7th. The all important Non-Farm Payroll headline came in far below expectations at 98,000 vs. 175,000. Winter storm Stella, a category 3 storm that affected the Northeastern United States during the survey weeks was squarely blamed for this disappointment. On the bright side, the unemployment rate figures fell a pronounced 2 tenths of a percent to 4.5%, printing the lowest unemployment level in almost a decade.
Looking at currency moves over the month, the Canadian dollar was negatively affected by the Trump Administration’s initiation of government level trade cases on exports such as dairy, lumber, and aluminum. With accusations of unfair counter export subsidies across its northern border, talk of tariffs combined with falling crude oil prices sent the Loonie down 3% from the time of the first headline on the 18th.
Falling gasoline prices dragged benchmark crude oil futures lower amid strong refinery activity and soft fuel demand. Specifically, U.S. production, which has risen to August 2015 highs, has continued to undermine efforts by the Organization of Petroleum Exporting Countries and its allies to reduce global output. With U.S. crude production on the rise for 9 weeks straight, a number of crude-producing countries, spearheaded by Saudi Arabia, reached a draft agreement to extend output cuts in order to keep prices from falling further.
In Europe, independent candidate, Emmanuel Macron won the primary election round on Sunday the 23rd in the highly divisive French Election with a 23.7% share of the vote. He and runner-up candidate Marine Le Pen will face off in the final round of voting on Sunday May 7th. In a country where terrorism and an ongoing migrant crisis are among the key election issues, political correctness may very well motivate voters to lie to pollsters en masse. While Le Pen currently has a lower probability of being elected, her success has the potential to cause severe consequences for the future of the Eurozone and cannot yet be ruled out.
Looking ahead to the month of May, we start our calendars with a meeting of the Governors of the U.S. Federal Reserve on May 3rd, after which the U.S. employment situation report comes out on Friday May 5th. Sunday May 7th has Marine Le Pen facing Emmanuel Macron in the final round of the polemic French election. New Zealand and Australian Central banks hold policy meetings on the 10th and 15th respectively while we see a rate announcement from the Bank of Canada on the 24th .