CANADA: April Labour Force Survey Preview: Flat/Higher Employment Seen (2/2)

• Markets have traded with a risk off tone on Tuesday, with higher energy prices and lower equities reflecting the heightened level of uncertainty as Trump’s Iran deal deadline looms. Overall, there has been very limited impact on the US dollar index which remains close to the 100 mark as we approach the APAC crossover.
• Antipodean FX divergence has translated into a steady ascent for AUDNZD in early April, and today’s 0.5% rally has seen the cross reach a fresh cycle high above 1.2150. This places the cross at the highest level since 2013, with resistance appearing scant until 1.2344, the 61.8% retracement of the 2011-2020 range.
• Relative NZD weakness comes ahead of the April RBNZ decision on Wednesday, where Governor Breman is likely to reiterate that given monetary policy lags, it is better for fiscal policy to respond to a supply shock. All analysts expect an unchanged decision on the OCR, at 2.25%.
• Higher core yields kept pressure on the likes of CHF and JPY on Tuesday, with EURCHF rising to within a few pips of recovery highs at 0.9267 and USDJPY briefly piercing the 160.00 handle once again. Technicals remain supportive of a test of 160.46, the recent cycle peak and bull trigger, while intervention risks remain an offsetting risk.
• Elsewhere, Scandinavian FX divergence has also been in full flow, with an impressive 1.4% rise for NOKSEK today. In the process, the cross has pierced key resistance at 0.9859 (Jan 15 high), a clear break of which would expose parity as the next topside target. NOK has benefitted from the terms of trade channel since the Iran war started, with a hawkish Norges Bank decision providing additional support in late-March.
• Aside from the RBNZ meeting, FOMC minutes of the March meeting are also scheduled on Wednesday.

*ONLY TRUMP KNOWS WHERE THINGS STAND ON IRAN:LEAVITT TO FOX NEWS - bbg

• MNI interviews former Fed system executive Rick Roberts on monetary policy -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com