- US non-farm payrolls fall 36,000; unemployment rate steady at 9.7%
- ECB’s Weber: Euro will never be a soft currency
- Eurogroup’s Juncker hints at “secret” EU aid plan; Not needed for Greek aid
- Greece passes austerity bill despite street protests
- Merkel: No question of bilateral aid for Greece
- US consumer credit rises$5 bln in January; first time in a year
- S&P 500 rises 1.4%
- US 2-yr yields rise 5 bp to 0.90%; 10-yr rises 8 bp to 3.69%
- Oil rises $1.51 to $81.72; gold flat at $1132
- IMM specs cut dollar longs sharply
The dollar rallied across the board in the wake of the better-than-expected US employment report, with EUR/USD falling as low as 1.3530, Cable to 1.4995 and AUD to 0.9022 before the market shifted its focus to a “risk-on” mentality.
EUR/JPY led the pack, gathering steam as it blasted through important resistance at 121.90. The rally soon saw prices reach the 123.34 level before falling into a narrow consolidation range. Strong bids are eye on pullbacks to the 122.60/65 area.
USD/JPY broke above 89.50 resistance in the run up to the US employment report as JPY longs ran for cover on signs that an easier BOJ and a more serious MOF effort to keep the JPY from strengthening shifted market psychology. The rally reached 90.60 in short-order, stalling just pips from the 61.8% retracement of the 92.16/88.14 decline. Stronger US bond yields and increased odds that Fed action to hike rates may be brought forward (a little) helped boost the dollar versus the JPY. Late in the day we learned that long positions on the IMM nearly doubled from the week before, helping further explain the liquidation and rush into higher-yielding currencies.
Cable rose on reduced risk aversion, reaching 1.5166 and AUD reached 0.9092. Both were in heavy demand versus the JPY.
