Forex headlines for April 4, 2014:
- March US non-farm payrolls 192k vs 200k exp
- Canadian March employment +42.9K vs +22.5K expected
- Canadian Ivey PMI 55.2 vs 59.0 expected
- ECB has modeled up to 1 trillion euros of QE – German press
- ECB’s Constancio expects positive growth in Q1 2014
- Constancio: Next ECB staff projections will consider whether March’s low inflation affects ECB’s medium term forecast
- Constancio: Near future will be very important to see if inflation has bottomed out
- Coeure says ECB wants to help recovery with “low, indeed lower, interest rates”
- Talk of a flare up between Turkey and Syria
- Italian 10-year yields hit record low
- Gold up $15 to $1302
- WTI crude up 76-cents to $101.05
- Nasdaq falls most since 2012
- JPY leads, EUR lags
The first take from the market on non-farm payrolls was that it was good news but after some time to digest it’s a completely different story. USD/JPY perked up to 104.13 after the report — the highest since January — and then started a long, painful slide down to 103.20. It’s impressive that it’s not lower, given the mangling in the stock market. It was the worst day in the Nasdaq since 2012. We go out 2 pips off the lows.
The euro fell to the lowest since the end of February. 1.3700 had broken in European trading but it wasn’t until stops below 1.3690 broke than it rolled over. Even then, the bottom owas 1.3673 and the market wasn’t in a hurry to sell — even though Constancio, Coeure and the German press hammered it with headlines. The 100dma at 1.3689 also broke briefly. As of writing we’re looking to close just under 1.3700
The Canadian dollar was a standout performer after USD/CAD finally fell through 1.1000. The Canadian jobs report was excellent and that busted the wall of stops below the big figure and down to 1.0957. Corporate bids at 1.0955/50 stopped the bleeding and the pain the risk trade helped a bounce to 1.0984.
AUD/USD took yet another look above 0.9300 as risk trades waned but dropped back slightly to leave longs looking for a real break waiting a bit longer.
US stocks go out barely off the lows and with not much on the data docket next week we could have some fun and games as the market continues to decide whether the weather was more than just a blip.
Just a heads up for you late Sunday/early Monday risers, the BOJ releases it’s policy announcement on Monday morning
Thank you all for your interaction this week and I hope it’s been a profitable one for you. I hope you have a very good weekend
Ryan
