- Non-farm payrolls +80K vs +90K exp, revisions negligible
- Unemployment rate 8.2%, as expected
- EUR/USD falls to lowest since 2010
- Canadian employment +7.3K vs +5K exp
- WSJ: Some Fed members considering MBS purchases
- Samaras says Greece has missed deficit targets
- ECB’s Coeure: rate cut was due to deflation risk
- Coeure: Can buy bonds for mon pol reasons
- Coeure: QE not on the tableright now
- SNB reserves rise 60B francs in May
- EU says no money for Greece until programs get on track
- EU: no common bank supervision before mid-2013
- JPM and GS close European money market funds due to 0% deposit rates
- Canada Ivey PMI 49.0 vs 55.8 exp
- Italian 10s +5 bps to 6.02%, Spanish 10s +18 bps to 6.95%
- Schatz yields back below zero, 10-year yields -6 bps to 1.33%
- S&P 500 down 0.9% to 1355
- On the week S&P 500 down 0.55%
- Gold -$21 to 1583
- WTI -$3 to $84.22
- JPY leads, EUR lags on the day and the week
The euro took losses on all sides as risk aversion sparked by soft non-farm payrolls data translated into risk aversion.
EUR/USD tumbled 50 pips immediately after the report but found support at 1.2330. That support slowly eroded until stops began to blow out below 1.23 and below the May low of 1.2286. That level also represents the low since 2010 and it gave out as Europe prepared to close for the weekend. The losses continued all the way to 1.2260 before at late rebound to 1.2290.
USD/JPY took the NFP report as a sign that QE3 is growing more likely and the pair fell to 79.49 from 79.90. Bids at 79.50/60 buffered the drop and even the slight tick below wasn’t enough to set off stops.
The Canadian employment report was stronger than expected with a large gain in full-time employment but USD/CAD took its cues from NFP and USD/CAD climbed more than a half-cent to 1.0280 before settling back to 1.0190.
