US Data Mixed, Payrolls Eyed

The dollar was mixed in the Thursday session, climbing higher against the yen and euro, while remaining pressured near 30-year lows versus the Loonie. The reports released earlier today continued to reinforce the mixed nature of the US economy and provided support for the greenback, which firmed to a near 3-month high against the yen at 121.96.

The economic data included Q1 GDP, which fell short of consensus forecasts on an annualized basis at 0.6% -- missing estimates for a decline to 0.8% from 1.3% and its slowest pace of growth in over 4 years. The drop in growth was attributed to the burgeoning trade deficit and contraction in inventories. Inflation was slightly softer with the personal consumption expenditures drifting to 3.2%, from 3.3% while the core PCE held steady at 2.2%. Propping the dollar higher was a larger than forecast jump in the May Chicago PMI at 61.7, sharply higher than calls for a 54.0 reading from 52.9 in April. The data confirms the rebound in the manufacturing sector and bodes well for tomorrow’s ISM report.

The highly awaited non-farm payrolls report for May is due out tomorrow morning at 8:30 AM and is expected to jump to 130.0k versus 88.0k a month prior. The unemployment rate is forecasted to stand pat at 4.5% while April core PCE is expected to creep up to 0.2% from a flat reading in the previous month. The May Manufacturing ISM is largely seen unchanged at 54.0, down marginally from a month earlier at 54.7.