AUTOREFRESH 
ForexLive US wrap-up: ISM data lessens double-dip fears
- ADP employment report: US private sector lost 10,000 jobs in August
- ISM rises to 56.3.; much stronger than expected
- Fed’s Plosser downplays utility of MBS reinvestment; opposes more QE without clear deflation dangers
- Fed’s Fisher: Ball in Congress’s court; Fed has done all it can
- S&P jumps 3.0% after ISM surprise
- US bonds slump, yields rise sharply after data; 10-yr notes up 11 bp to 2.58%
US markets opened in a risk-loving mood this morning after strong Australian and Chinese data. The mood was dimmed briefly by the downbeat ADP data which foretells a weak employment report on Friday but the expectation that the Fed will crank up the printing presses should the economy keep deteriorating limited the damage.
The EUR/USD took center stage in early New York dealing as a 1.2550/1.2850 came into play shortly after the ADP data. We rallied as high as 1.2856 before falling back after the ISM report.
Focused turned from EUR pairs to commodity plays as the best of the risk-loving strategies. In fact EUR/CAD selling was a factor in the dip in EUR/USD off the highs in addition to a rise in US bond yields. EUR/USD finds support in the short-term at the 1.2780 level. Small stops are eyed below that level. Steady real-money interest was noted to buy EUR/USD in very quiet afternoon markets.
USD/JPY jumped ahead of the data on talk of a bullish analysis by a noted NY think-tank and really took off after ISM. We jumped to the 94.67 level before sell orders from Japanese exporters were able to cool the rally. Japan missed a golden opportunity to take USD/JPY higher right after the data…
Dips were relatively shallow with most afternoon dealings in the 84.40s. It is a decent close considering after ADP were close to trend lows, slipping to 83.66.
Commodity currencies extended their gains after ADP with AUD nearing the 0.9100 level late in the day. USD ?CAD dipped below 1.05 and ends at 1.0510.
EUR/CHF and USD/CHF saw significant short-covering after the ISM data greatly lessened risk aversion. EUR/CHF ends at 1.3000 from 1.2916 NY lows. It reached 1.3040 on a squeeze. USD/CHF jumped from 1.0066 session lows to 1.0183 intraday and ends the session at 1.0155.
The first three hours of the US trading were fairly chaotic but markets barely budged through the afternoon hours, apparently content to wait for further clues on the economy. Improved claims and payrolls will keep the risk rally rolling while bad news on both will prompt renewed fears that the Fed will need to take further action.
Blimey try saying risk rally rolling without wobbling yer Rs
It was a flag yesterday Lil. But in fairness Zeke was on with the wedgie. It just worked out well. If you were topside thinking.
You people are over optimistic. How could FED be downbeat on economy and then these crappy moves take place. FED downbeat tone suggests lingering weakness in service and labor sectors. The worst is still to come. US economy is comsumption and services based, not manufacturing based.
He wuz right – and so was superwedgieman.
But it turned out ok anyway, ta, I closed the lot after our data this morning.
Been mostly playing with eur/jpy today.
I’m putting that one on my résumé
Superwedgieman… I like.
hello Aziz are you still short aud/cad whats your target?
Good morning, Sean. For what’s it is worth, please note that: 1) the US S&P Index is still (i. e., after its September 1st close) UNDER its “death trap”; 2) the US NASDAQ index is still (i. e., after its September 1st close) UNDER its “death trap”; and, 3) the DJIA closed – on September 1st – INSIDE its “death trap” – and, then, only by only 9 points. Thus, the stage may be set for a relatively hideous reversal of fortunes – in the US on this coming Friday morning – if the next “non-farm payroll” report isn’t as “wonderful” as what happened to US equities “last night”.
Hello Jahid,
yes I am indeed still short. The one thing I dislike in current set up is going long in a market that is overly bearish. Plus the close higher in S&P needs to show more signs to confirm any reversal.
My bet is S&P will need 3 or 4 days to topple current high. How often have we seen a strong rally that fails to maintain upside momentum later. There is more momentum to the downside than the upside. Plus that AUDUSD is freakingly overbought. How the hell could market participant price it there?
That AUDUSD must by all means crumble big times. It will have to crumble faster than others. Tommorow is another news.
JJack,
where are you. Hope you had enough stamina to hold onto that EURCAD short trade and EURGBP. Cheers,
thnks aziz, will wait for your email
SALAMS
Hi Sean,
I believe the US Stock market is due to fall this month. In your estimation,
if the dow drops 500+ will AUD/USD drop below 82? thx