NY Open: Over-hyped NFP fails to deliver

The US nonfarm payrolls report underwhelmed. The expected forecast-beating result was somewhat disappointing. (Actual NFP 157,000 versus a forecasted 190,00). Fortunately, unemployment dipped to 3.9%, matching predictions and providing damage controlfor the headline number.

The US trade deficit widened, and according to the Wall Street Journal, it did so at the fastest pace since November 2016.  If anything, the news will irritate President Trump. China will annoy the President further as well, as Beijing is planning to slap tariffs of between 5% and 25% on a range of US imports. 

FX markets reacted predictably to the US data. EURUSD popped to 1.1609 from 1.1570, GBPUSD jumped from 1.3002 to 1.3042 and USDJPY dropped to 111.38 from 111.60. The US dollar has recovered somewhat against the European currencies, but not against the yen.

The Canadian dollar got a double dose of good news. Canada’s trade deficit narrowed to a mere $0.63 billion, well below the forecast of a $2.3 billion deficit. The icing on the cake was the 4.1% increase in exports to $50.7bn, a record high, and the first time they have been above the $50bn mark. USDCAD was unable to break outside this week's 1.2975-1.3050 range.
Wall Street futures indicate a flat opening this morning.

The US dollar managed to rally against all the G-10 majors since last Friday’s New York close. The only exception was the Canadian dollar which managed a 0.55% gain (as of 13:00 GMT) The Swiss franc was unchanged.  The week ahead will be lacking in some of the drama and excitement seen in this week; there are only two central bank meetings, the Reserve Bank of Australia and the Reserve Bank of New Zealand. Neither bank is expected to deviate from their dovish interest rate policies.  China trade data will be a key focus, at least for the Antipodean currencies. Canada is closed on Monday.

USDX rangebound

September 2018 US Dollar Index future (source: Saxo Bank)

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (