Danske Research Team notes that EUR/USD stayed broadly unchanged in a 1.1620–1.1650 range as short-term US and Euro area rates were steady. The analysts highlight stronger US JOLTS data and a robust labour market, which they say is no longer cooling. They add that this combination of strong macro data and robust earnings challenges bearish views on US assets.

Dollar steadies with robust labour data

“It was a relatively quiet day in FX and fixed income market yesterday, where euro area inflation rose in line with expectations and energy prices were steady. Short-term US and euro area interest rates did not move much and consequently EUR/USD was about unchanged in 1.1620-50 range.”

“In the US, April JOLTS job openings surprised on the upside at 7.6 million (cons: 6.9), while hires eased to 5.1 million and layoffs were broadly unchanged at 1.7 million.”

“Even though the figures are for April and not May (as in Friday’s payrolls), they reinforce the picture of a robust labour market that is no longer cooling and may even be tightening again.”

“In the euro area, HICP inflation rose to 3.2% y/y (cons: 3.2%, prior: 3.0%) as expected, but slightly above country indications. Core inflation increased more than expected to 2.5% y/y (cons: 2.4%, prior: 2.2%), driven by stronger services. Overall, this should limit how hawkishly the print is interpreted, although the services surprise still makes it a marginally hawkish outcome for the ECB, consistent with our call for a June hike.”

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