USD: Softer NFP did little damage to dollar rally
The world economy remains in the clutches of an energy price surge, where crude prices look to be following gas prices higher. As our team pointed out on Friday in relation to gas anyway – there are no quick fixes. FX performance over the last week has largely fallen in line with the energy story. The outperformers have been the currencies of key energy exporters, Norway, Russia and Canada. While under-performing have been the energy importers of Japan, Turkey and Hungary.
Bouyed by the positive income shock of the energy rally, the central banks of Russia and Norway are some of the most hawkish in their peer group. And a good jobs number in Canada on Friday supports the view that the Bank of Canada could be joining them with a hike in 1H22.
On the subject of jobs, Friday’s headline NFP jobs miss has done little to dampen Fed tapering/tightening…