The latest jobs numbers out of the U.S. significantly beat expectations.  April’s non-farm payroll figure jumped by 165,000 beating the 150,000 forecast.  The unemployment rate has dropped to 7.5%, its lowest level in four years.  Today’s report also posted substantial upward revisions for March and February.

Markets are being buoyed by the report.  North American equities all opened higher today.

Bond yields are up 2 – 3 bps.

Also out of the U.S. today:

The ISM service sector index came up short of expectations, printing at 53.1 for April.  That’s down from 54.5 in March and missing the 54 forecast.  And U.S. factory orders dropped 4% in March.  Aircraft led the decline.  But orders for non-defence capital goods, excluding aircraft, rose 0.9%, indicating an uptick in plans for business spending.

The European Central Bank has followed expectations and dropped its benchmark interest rate to a record low.  The Bank trimmed a quarter-point off the rate and it now stands at 0.50%.  The ECB is acting in response to foundering economic data and falling inflation.

North American markets appeared to take heart in the move, opening generally higher and reversing yesterday’s selloff.  Bond yields are generally unchanged.  Yesterday the U.S. Fed maintained its policy rate and QE plan.  But it added a line noting it could increase or reduce its bond buying program depending on need.

The weekly first time jobless claims numbers out of the U.S. should bolster confidence.  They fell to a five year low, dropping by 18,000 to a seasonally adjusted 324,000; contradicting yesterday’s ADP hiring report.  The four-week rolling average fell by 16,000.

In Canada the merchandise trade balance shows a net surplus of $24 million dollars in March.  Exports climbed 5.1% while imports climbed 1.7%, eliminating February’s trade deficit.  Exports to the U.S. rose 4.0% to $29.5 billion in March, on higher exports of motor vehicles and parts, and energy products.

All of the economic data releases are coming out of the United States today.  The biggest will be the policy announcement from the U.S. Fed this afternoon.  Although it is the major release it isn’t expected to contain any changes from current policy.  The European Central Bank makes its announcement tomorrow and is widely expected to trim its benchmark rate.

The anticipation of the European rate cut appears to have bolstered equity markets on the continent but in North America the day started, down.  Bond yields are generally lower by 1 bps.

Other data:

Payroll processer ADP has released its private sector hiring report for April.  It shows an increase of 119,000, which is well off expectations for a 150,000 increase.  It also shows a slowdown from the revised March figure of 131,000.  The government’s employment numbers come out Friday.

The ISM manufacturing index for April indicates a slowing rate of growth.  The index fell to 50.7, down 0.6 points from March, but still in expansion territory.

And construction spending in the States fell 1.7% in March compared to a month earlier.  The biggest drop was in government projects.  However, spending was still 4.8% higher than a year ago.  

Canada’s gross domestic product for February beat expectations, growing by 1.7% on an annualized basis.  Forecasts had called for a 1.3% rise.  Seasonally adjusted GDP also beat forecasts rising 0.3%.  Growth was widespread and was led by the resource sector.

North American markets opened mixed and appear to be taking a breather while they wait for central bank policy announcements from the U.S. and Europe.  The Fed is expected to stand pat and the ECB is expected to cut its rate.  European unemployment has hit a new record high of 12.1% and inflation has tumbled to 1.2%.   

Bond yields are down 1 bps.

In the U.S., the Case-Shiller home price index for February clocked-in with its ninth straight gain, rising 0.3% over January.  The year-over-year increase comes in at 9.3%.

And U.S. consumer confidence as measured by the Conference Board climbed more than expected in April, rising to 68.1 – an increase of more than 6 points from March.