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Syria missile attack overshadows non-farm payrolls and Trump-Xi summit

President Trump's overnight missile strike on the Syrian base that launched chemical weapons atta‎cks earlier this week sent shockwaves through world markets overnight. Stock markets have come under pressure with US index futures falling 0.2%, and the Dax dropping 0.5%.

As often happens when tensions rise in the ‎Middle East, crude oil is soaring. WTI is up 1.2%, while Brent is up 1.1%, pulling oil-sensitive currencies like CAD and NOK along for the ride. Rising geopolitical tensions also has gold rallying 1%. Commodity price action could boost interest and activity in mining and energy stocks today. 

‎It remains to be seen if the Syria flare-up will continue to steal the spotlight from today's big events, which traders have been waiting for all week.
The long-awaited summit between President Trump and Chinese President Xi started with a dinner last night and continues today, with more meetings planned. So far relations have been cordial rather than frosty. There had been suggestions that this could be a difficult meeting with trade relations, currency manipulation and North Korea all potential flashpoints right at the top of the agenda. 

German trade data released this morning showed an increased surplus which was higher than expected which could have a negative impact on the president's tolerance related to trade issues. The UK posted worse than expected house price, industrial production, construction spending and trade figures, sending Sterling down sharply and propping up the FTSE which is flat so far today.  
Today’s other big impact event is the US nonfarm payrolls report. There has been some question lately with soft data like PMI and consumer confidence surveys for the US running very strong but hard data points like consumer spending, retail sales and industrial production slowing a bit. Payrolls are the top hard data report of the month and could have a big impact on sentiment. 
The street is expecting nonfarm payrolls to drop back to 180K from 235K last month. Considering that jobless claims have remained low into April, with a surprisingly strong report today, the employment component of manufacturing PMI remained strong and ADP payrolls beat the street by nearly 80K, I think the street is being overly pessimistic. Even with a US government hirin freeze, I think the US could post job growth of 250K this month as the new administration continues to be well received by US businesses. 
There are two other components of the report that could attract attention. Manufacturing payrolls are expected to decline and could attract attention from President Trump with his drive to bring factory jobs home, and could become an issue in his meetings with President Xi. Also, average hourly earnings could impact trading if there is a big surprise as the potential impact of inflation on monetary policy remains a key focus point with traders. 
Canada employment is also due Friday morning. The street is expecting a 5K net increase in jobs down form 15K last month. Once again I think the street is too pessimistic and I am thinking 20K. More important than the headline figure could be the full-time/part-time split. Last month there was a huge conversion into full-time (up 105K) jobs from part-time jobs (down 90K) a positive sign for the Canadian economy. It will be interesting to see if this continues and becomes a trend or if there is a retrenchment. Later in the morning, the Bank of Canada unveils its new bank note and  Ivey PMI is due.  

Economic news

Significant announcements released overnight include:

UK Halifax house prices            3.8% vs street 4.0% vs previous 5.1%
UK industrial production            2.8% vs street 3.7% vs previous 2.7%
UK manufacturing production   3.3% vs street 3.9%
UK construction output            0.5% vs street 1.9%

UK trade balance            (£3.6B) vs street (£2.2B)
Germany trade balance            €19.9B vs street €17.7B and previous €14.8B

Germany industrial production        2.5% vs street 0.5%
Norway industrial production         (0.5%) vs previous 1.3%

Upcoming significant economic announcements include:

1:00 pm BST        UK NIESR GDP estimate        street 0.6%

8:30 am EDT        US nonfarm payrolls            street 180K vs previous 235K
8:30 am EDT        US private payrolls            street 170K
8:30 am EDT        US manufacturing payrolls        street 17K vs previous 28K
8:30 am EDT        US unemployment rate            street 4.7%
8:30 am EDT        US average hourly earnings        street 2.7% vs previous 2.8%

8:30 am EDT        Canada jobs change            street 5K vs previous 15K
8:30 am EDT        Canada full-time jobs            previous 105K
8:30 am EDT        Canada part-time jobs            previous (90K)
8:30 am EDT        Canada unemployment rate        street 6.7%

10:00 am EDT        Canada Ivey PMI             street 56.0
10:00 am EDT        Bank of Canada Poloz unveils new bank note

12:15 pm EDT        FOMC Dudley speaking

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