Australian dollar rebound strongly on much better than expected job data. The employment market grew 37.7k in March, more than double of expectation of 15.0k. Prior month's figure was also revised up to 42.0k, nearly triple of original estimate of 15.6k. Unemployment rate dropped to 6.1% versus expectation of 6.3%. After the data release, traders are pricing in 56% chance of a rate cut from RBA in May, down from nearly 70%. Also, earlier in the month, markets were pricing in full chance of a 25 bps rate cut by the end of May. At this point, markets are still pricing in two more cut within this year to 1.75% but such expectations would definitely be challenged by incoming data. AUD/USD reaches as high as 0.7781 so far comparing to this week's low of 0.7552.
EUR/USD recovered after dipping to 1.0520 this week but such recovery is so far rather weak. The ECB left the policy rates unchanged and reaffirmed that the asset purchase program would continue through September 2016 and at least until "we see a sustained adjustment of the path of inflation consistent" with the 2% ECB medium-term target. While acknowledging improvement in the financial conditions following implementation of the QE program, President Mario Draghi stressed that risks are skewed to the downside despite gradual rebalancing. Against this backdrop, any speculation about earlier tapering is 'premature'. Draghi also confirmed that the deposit rate would not be cut further below the current -20 bps. At the press conference, the president also indicated that concerns about bond scarcity are exaggerated and answered questions related to Greece's bailout. More in ECB: QE Remains in Progress until Sustained Adjustment of Inflation Seen.
USD/CAD dived through key near term support of 1.2351 after less dovish than expected BoC statement and extended rebound in crude oil. Current development argues that a medium term top could be in place at 1.2834 already and the correction from there could extend much deeper. The BOC left its target for the overnight rate unchanged at 0.75% for the 3rd consecutive month. Correspondingly, the Bank Rate stayed at 1% and the deposit rate at 0.5%. Yet, it sent a less dovish message this month by revising higher the inflation forecasts, despite downward revisions of 1Q15 and FY 2015 growth forecasts. On net, the central bank noted that risks to inflation are 'roughly balanced'. We retain the view that the monetary policy would stay unchanged for the rest of the year. More in BOC Less Dovish About Inflation.
Elsewhere, New Zealand business manufacturing performance index dropped to 54.5 in March. UK RICS house price balance rose to 21 in march. Swiss PPI is the main feature in European session. US will release housing starts, building permits, jobless claims and Philly Fed survey later today.