USDJPY,H1
US initial jobless claims fell -677k to 3,169k in the week ended May 2 following the -596k decline to 3,846k (was 3,839k) in the last week of April. It’s a fifth week of pull-back from the 6,867k record high in the week of March 27. The 4-week moving average dipped to 4,173.5k from 5,035k (was 5,033k). But continuing claims continue to soar, rising 4,636k to 22,647k in the April 25 week after surging 2,192k to 18,011k (was 17,992k) previously. The continued declines in claims from the March 27 peak suggests some of the relief measures designed to prevent even more of a catastrophe in the labour market are helping, though it will be a long, difficult road back as:
- Unemployment rates tend to “stick” and persist
- Many companies will fail altogether it will take time for new start-ups
- Many of the unemployed will simply drop out of the labour force
- Earnings (the persistent problem as Unemployment was falling and the economy was growing) could be hit significantly.
Earlier, US Challenger reported announced layoffs surged a record 448,841 to 671,129 in April, the highest on record, with COVID-19 responsible for 633,082 of them. That’s up 1576.9% y/y. Most of the cuts, 318,319 came from the entertainment/leisure sector that includes bars, restaurants, hotels and amusement parks. Retailers announced the second highest planned reductions at 84,502. Announced hirings dropped -538,971 to 285,637.
Federal Reserve Bank of Minneapolis President Neel Kashkari (a key Dove on the Fed) said “The number tomorrow will probably be something like 16%, or 17%,” in an interview on NBC’s “Today” show earlier today, on the eve of the monthly US employment report. “I think the real number’s probably around 23 or 24%. It’s devastating.”¹
USDIndex holds 100 at 100.30, EURUSD is anchored below 1.0800 and trades at 1.0780, the Yen has weakened all day with the USDJPY holding gains over 108.50 whilst Cable steps down a leg to test S1 at 1.2300.
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Stuart Cowell
Head Market Analyst
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