NY Open: NFP all sizzle, no steak
FX Trader, Loonieviews.net
Summary: There was a lot of hype and anticipation ahead of the US employment report but the headline miss, which came along with a 48-year low in unemployment, was met by a muted reaction in the New York markets.
There was a lot of hype and anticipation ahead of the US employment report. It proved to be all sizzle but no steak. Nonfarm payrolls added 134,000 jobs in September, well below the consensus forecast of 185,000 and greatly disappointing to those expecting an upside surprise.
The surprise has been the FX market’s rather blasé reaction to the data.
The US dollar is marginally lower against the major G-10 currencies and unchanged against the Japanese yen since the New York open. However, since last week’s New York close, the greenback has made impressive gains against NZD, (2.22%,) AUD, (2.0%), and JPY (1.67%). EURUSD is down 0.65% while GBPUSD has risen 0.46%.
Next week, FX traders will refocus on US/China developments. There hasn’t been any progress in trade talks, and the anti-China rhetoric has ratcheted higher. There is a chance that USDCNY jumps in response to the recent US dollar strength and rhetoric when China reopens on Monday after a week’s holiday.
There were employment numbers that did surprise to the upside today, but they came from north of the US border. Canada added 63,300 jobs in September beating the forecast for a gain of 25,000 jobs. However, all the gains were part-time which took the bloom off the rose, leaving USDCAD unchanged as of 14:00 GMT.
Wall Street shrugged off the employment report, preferring to keep its eyes on Treasuries. Ten-year Treasury yields are firm at 3.214%, supported by the US unemployment rate touching a 48-year low.
EURUSD continues to bounce inside a 1.1450-1.1550 range since Wednesday. The downtrend that began September 27 following the break of support at 1.1650 comes into play at 1.1550, and while prices are below that level, the target is 1.1450. A topside break would lead to 1.1650, then 1.1730.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Energy crisis could turn energy stocks into secular winnerWith long-term expected returns for the global energy sector close to 10%, we look at 40 stocks that could be set to cash in.
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.