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US Session: Non-Farm Payrolls Better than Expected but Still Paint a Very Bleak Outlook
January 09, 2009 6:45 PM CET
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G10 Advancers and Decliners vs USD |
| | Jpy | 1.10 |  |  | Nok | -0.02 | | | Gbp | -0.20 | | | Nzd | -0.44 | | | Aud | -0.68 | | | Cad | -0.72 | | | Chf | -1.61 | | | Eur | -1.69 | | | Dkk | -1.69 | | | Sek | -1.94 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 8,592.00 | - 1.20 | | S&P future | 892.20 | - 1.60 | | Nasdaq futures | 1,227.00 | - 1.80 | | FTSE futures | 4,425.50 | - 1.22 | | CAC futures | 3,299.00 | - 0.89 | | DAX futures | 4,787.00 | - 2.37 | | SMI Futures | 5,639.00 | - 1.07 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 40.19 | - 3.62 | | Gold | 863.40 | + 0.70 | | Silver | 11.43 | + 2.79 | | USD Index | 82.33 | + 0.98 | | VIX | 42.30 | - 0.61 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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Currency Tech |
AUDUSD
R 3: 0.7353
R 2: 0.7269
R 1: 0.7142
CURRENT: 0.7034
S 1: 0.6957
S 2: 0.6919
S 3: 0.6853
EURJPY
R 3: 128.56
R 2: 127.67
R 1: 126.52
CURRENT: 124.46
S 1: 124.11
S 2: 123.71
S 3: 122.57
USDSGD
R 3: 1.4905
R 2: 1.4896
R 1: 1.4845
CURRENT: 1.4789
S 1: 1.4706
S 2: 1.4675
S 3: 1.4502
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Market Brief |
The dollar surged against the majors following better than expected payroll data. The EurUsd dropped nearly 200pips to the low range of 1.35, while the UsdJpy fell 100pips finding support near 90. The GbpUsd is flat, trading very closely to its previous close, mostly due in part to the market digesting recent changes in monetary policy. Equity markets are lower in the US and Europe, with the Dow off 1.27% or 100pts and the SPX down 1.58% or 14pts. Bond buyers were back in the market purchasing was heavy in 2yrs driving rates in 6bps at the portion of the curve. Commodities were mixed with oil below $40 at $39bbl and gold higher by 1.23% at $867oz.
The Eurozone surprised the market with better than expected retail sales at 0.6% vs. 0.0%. But this data point was not enough to support the Euro, as dollar the dollar built strong momentum after Non‐Farm Payrolls announcement. The Euro sunk over 200pips as some Analysts expected the drop in NFP to be as high as 700k. NFP data came in at a surprising ‐524k, which was followed by a disappointing unemployment reading of 7.2%. Traders should take one very critical point from today’s events, and that is the idea of financial Armageddon being priced into the market. The risk aversion trade reemerged in today’s session but is unlikely to last allowing the Euro to move into recovery mode in the near‐term. Going long the EurUsd at these levels could be solid way to position yourself for a short‐term rally at the early part of next week, Traders who are moving in and out of the market can take advantage of the volatility.
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Asian Session - Bracing for a Potential NFP Whopper
January 09, 2009 11:12 AM CET
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G10 Advancers and Decliners vs USD |
| | NOK | 0.65 | | | | JPY | 0.50 | | | | CHF | 0.19 | | | | SEK | 0.02 | | | CAD | -0.02 | | | EUR | -0.05 | | | DKK | -0.12 | | | GBP | -0.17 | | | NZD | -0.68 | | | AUD | -0.98 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 8,836.80 | - 0.44 | | Hang Seng Index | 14,377.44 | - 0.26 | | Shanghai Index | 1,904.86 | + 1.42 | | FTSE 100 Index | 4,490.21 | - 0.33 | | DAX Index | 4,865.44 | - 0.29 | | SMI Index | 5,724.19 | - 0.46 | | DJIA futures | 8,657.00 | - 0.44 |
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World Markets |
Current Level |
% Change |
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| Gold | 854.11 | - 0.38 | | Silver | 11.15 | + 0.22 | | VIX | 42.56 | - 1.91 | | Crude wti | 42.04 | + 0.81 | | USD Index | 81.72 | + 0.22 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Industrial production, % m/m | -0.5,-5.2 | -1.7,-5.2 | UK / 9.30 | | Manufacturing production, % m/m | -0.5,-5.2 | -1.4,-4.9 | UK / 9.30 | | Retail sales, % m/m | 0.2,-1.5 | -0.9,-2.2 | EZ / 10.00 | | Industrial production, % m/m | -2.0,-5.5 | -2.1,-3.9 | GE / 11.00 | | Manufacturing production, % m/m | -- | -2.2,-3.9 | GE / 11.00 | | Unemployment rate, % | 6.5 | 6.3 | CA / 12.00 | | Net change in employment, thous | -21.0 | -70.6 | CA / 12.00 | | Change in non-farm payrolls, thous | -485 | -533 | US / 13.30 | | Unemployment rate, % | 7.0 | 6.7 | US / 13.30 | | Average hourly earnings, % m/m | 0.2,3.6 | 0.4,3.7 | US / 13.30 | | Wholesale inventories, % m/m | -0.8,6.6 | -1.1,8.0 | US / 15.00 |
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Currency Tech |
AUDUSD
R 3: 0.7353
R 2: 0.7269
R 1: 0.7142
CURRENT: 0.7034
S 1: 0.6957
S 2: 0.6919
S 3: 0.6853
EURJPY
R 3: 128.56
R 2: 127.67
R 1: 126.52
CURRENT: 124.46
S 1: 124.11
S 2: 123.71
S 3: 122.57
USDSGD
R 3: 1.4905
R 2: 1.4896
R 1: 1.4845
CURRENT: 1.4789
S 1: 1.4706
S 2: 1.4675
S 3: 1.4502
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Market Brief |
The Usd was range-bound in the Asian session, as uncertainty surrounding todayʼs NFP report has hindered the markets ability to find direction. The EurUsd traded between 1.3740 to 1.3640, while the UsdJpy traded between 91.58 to 91.04. Currently, Asian equity indexes are painting a mixed picture, while European markets are not fairing much better. Commodity prices have stabilized, with risk appetite and volatility slacking slightly. On the political front, President-elect Obama gave a speech on the US economy but failed to provide solid details. However, he did stress the fact that the price tag for this stimulus package would be hefty.
Yesterday, as expected, the BoE's MPC lowered its policy rate by 50bp to 1.5%. This rate is now the lowest on record, which is impressive considering that the institution has been active since 1694 and highlights the severity of the current economic crisis. MPC member attempted to balance, saving the UK economy with staying away from a cut that would pressure the Sterling. We expect further cuts ahead, very close to zero, as the domestic economic conditions deteriorates (illustrated by today's manufacturing output release) and inflation continues to be a non-issue.
In European session, markets will be watching German industrial production, which is expected to show that conditions are quickly spiraling downwards, which follows on the heals of yesterday's EC survey showing recession in the Euro zone is deepening. For those participant that are betting on the Eurozones growth prospects and the Euro, these new numbers should be a eye opener that conditions will get worse before they get better.
Today's US session highlight is obviously the US NFP report. Following the ADP numbers earlier in the week, the markets are clearly pricing in a negative number. The real question is where is consensus? Estimates run the range from -500k and up (estimates up to -800k) but we are benchmarking the release at -520k. We expect the build up to the release will be Usd negative, as traders clear out of the way of a potential massive decline. And from there, the greenbacks near term fate depends solely on the size of the decline.
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ACM Advanced Currency Markets SA (hereinafter referred as ACM) is a professional financial intermediary, directly regulated by the Swiss Federal Department of Finance, Anti Money Laundering Control Authority. As forex specialist, ACM provides only currency trading via highly professional forex trading software. All customers are aware that this information or any part thereof has been prepared without taking account of your objectives, financial situation and/or needs. This information is not intended as personalized investment advice and does not constitute a recommendation. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. The analysis is based on the information which ACM finds reliable and accurate, but ACM does not assume any responsibility for any material nor for the transactions made on the basis of the information or the estimates of the analysis. ACM cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct, indirect and/or consequential loss arising from any use of this information, document or its content. All opinions and estimates constitute ACM analysis as of the data and are subject to change without notice. ACM does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions. Past performance is not a reliable indicator of future performance.
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