Global FX: Payrolls a setback to USD; still constructive on carry post-JPY intervention

Recent US payroll data, which came in weaker than expected, serves as a material setback for tactical dollar upside, though broader US cyclical indicators remain mixed. Despite recent Japanese Yen intervention and equity market volatility, the global carry trade maintains significant resilience, outperforming the sharp drawdowns observed in 2024. Strategic focus in European markets centers on using the Swiss Franc as a funding currency against high-beta assets, supported by a conducive growth environment and central bank positioning. Meanwhile, the Canadian Dollar faces persistent idiosyncratic headwinds from trade policy and tariff concerns, which temper enthusiasm for a bullish outlook despite recent improvements in domestic economic data. Market participants continue to monitor inflation prints and central bank policy shifts as key drivers for near-term currency valuations and the sustainability of current carry trade positions.