- US non-farm payrolls fell 598,000 in January. Unemployment rate rose to 7.6%.
- Obama appeals for stimulus passage, names economic panel
- Bill comes up for a vote in Senate this evening, then goes to House/Senate conference committee to work out differences in bills.
- ECB’s Gonzalez-Paramo: When inflation expectations fall, ECB must cut rates
- Canada loses 129,000 jobs, unemployment rate rate rises to 7.2%
- Canadian PM Harper says stimulus assumed sharp job losses, worst to come
- Canadian FM Flaherty appeals to G7 partners to avoid protectionism
- US consumer credit falls for third straight month; first time since 1991 recession.
- SNB’s Jordan: A somewhat weaker franc would be welcomed
Reflation was the buzz word on the Street today as a sharp rally in equities (+2.5%), a rise in bond yields (10s close at 2.99%) and climb in commodity prices (CRB +1.4%) was seen despite the poor US employment and consumer credit data. Investors were hopeful that a stumulus package of some sort will be finalized in coming days as well as the bank bailout package which is due midday Monday in Washington.
EUR/USD, USD/JPY and of course EUR/JPY all rallied as risk aversion lessened.
EUR/USD tested resistance at 1.2990, USD/JPY revisited yesterday’s highs at 92.20 while EUR/JPY made a new high at 119.72. Talk made the rounds during the London session of a buy order in EUR/JPY of between EUR 3 and 5 bln for a French owned Japanese automaker.
Commodity currencies rallied (despite the bad Canadian figures) as USD/CAD reversed early gains to 1.2539, falling back to 1.2235 late in the day. AUD/USD was in demand at the London fixing and stayed firm in afternoon trade, reaching 0.6800 before falling into a consolidation.
Cable extended recent gains, trading up to 1.4840 before closing around 1.4800.
