- US nonfarm payrolls rise 39,000; unemployment rates rises to 9.8%; far weaker than expected
- Canadian employment rises 15,200; unemployment rate falls to 2-year low
- Non-manufacturing ISM survey rises to 55.0 in November from 54.3 in Oct
- US factory orders fall 0.9% in Oct, as expected
- German FinMin Schaeuble renews attack on the Fed; market doubtful of euro’s make up; Not much prospect for political union at the moment
- Spanish cabinet approves fiscal steps
- Eurogroup’s Juncker: Policy makers are wiser than financial markets
- Bernanke says Fed may buy more than $600 bln in Treasuries
- US 10-year notes dive from 3.05% to 2.90% after NFP; close at 3.01%
- S&P 500 rises 0.25% to 1225. Up 3% on week
No jobs? No problem! Uncle Ben will keep the presses running and everything will be just fine.
The market came to that conclusion early in the day and “risk on” was the rallying cry for the balance of the session. Those hopes were essentially confirmed by the Fed chief himself moments before the close on Wall St.
There was a very short-lived wave of risk aversion immediately after the employment report but EUR/USD did not participate…It burst from 1.3250 to 1.3375 and never really looked back.
Pullbacks were shallow and we end the session with the euro flying as comments Bernanke made for broadcast this weekend that the Fed may buy more than $600 bln filtered into the market. 1.3436 is the high seen so far. 1.3465/70 is an important resistance area, the 38.2% retracement of the 1.4283/1.2964 dive.
USD/JPY ends on its lows of 82.54 after the Bernanke comments as short-end rates fell sharply on the combination of the fluky payrolls data (which is out of sync with ISM, ADP, and retail sales) and on Bernanke’s QE comments.
AUD/USD was bid to the boots well before the Fed comments leaked out but it ends at 0.9935, supported by dollar debasement, commodities and surging asset prices, Chinese rate hikes be damned…
USD/CAD held above 1.00 despite a drop in the Canadian employment rate and a surge in commodities and other assets.
Cable rallied and closed at 1.5780 highs but underperformed EUR/USD as EUR/GBP rose as European sovereign debt concerns were soothed by a second day of heavy ECB bond buying.
While the EU continues to look inept and reactionary, the ECB remains the last best hope for the single currency. So far, they have dug it out of the ditch twice in six months…and spent only EUR 68 bln in the process (that we know of). We get updated data on Monday.
