- US nonfarm payrolls fall 95,000; unemployment rate steady at 9.6%; private sector adds 64,000 jobs; government sheds 153,000 jobs, 77,000 of them census workers
- Canada loses 6,600 jobs, unemployment rate falls to 8.0%
- Eurogroup’s Juncker: EUR too high at 1.40
- ECB’s Nowotny: Strong euro not helpful to recovery
- Fed’s Bullard: QE not baked in the cake for November; only one vote matters on Fed Board- the chairman’s
- US wholesale inventories rise 0.8% in August
- Brazilian FinMin: Plaza-type accord possible
- PBOC’s Zhou: CNY reform to be carried out gradually; plan to raise domestic demand, increase social safety net, and pursue exchange rate reforms; dollar still most important reserve currency
- Dollar short on IMM near record at $30.5 bln, up from $22 bln last week
- S&P 500 rises to 5 month high at 1165; US 2-year note yield falls to 0.35%
- CRB index rises to 2-year high at 295.00, up 2.7%
A very volatile morning surrounding the release of the US employment report. The dollar saw some short-covering ahead of the US employment report as St.Louis Fed president Bullard tried to put the QE genie back in the bottle. He said a case can be made for holding off on quantitative ease as the economy continues to grow slowly. This from the man who fanned the QE flames by shedding his hawkish tone a month or so ago and laying out the case for QE. Sorry Jim, the case was made well and the market is way too far down the road for the Fed to disappoint them now…
The employment report ramped up volatility with EUR/USD prices shooting as high as 1.3985 in under 10 minutes. The rally sputter quickly as Eurogroup head Juncker took to the wires to say that EUR/USD was too high at 1.4000. We tumbled to 1.3835 on that comment. We recovered back above 1.39 fairly quickly but spent much of the session consolidating between 1.3900 and 1.3940 the rest of the day.
The inability of EUR/USD to build on gains made earlier in the week despite the employment report suggests the EUR rally is losing velocity and a consolidation, if not a correction, looms ahead. Solid selling interest is seen toward 1.3880/1.4000, traders say.
USD/JPY slumped to 81.72 in early US trade without any concrete action from Japanese officials. The continue to watch closely, they assure us. The dollar rallied in afternoon trade with Tokyo banks high-profile buyers. We rallied to 82.18 late. Looks like someone was trying to send the market a message not to be short over the weekend.
AUD/USD made an impressive comeback, closing above the 0.9850 level after a pullback to 0.9710 early in the day. A big commodities rally (sparked by a spike in grain prices) and continued anticipation of QE from the Fed helped underpin the pair.
GBP/USD held up well despite some profit-taking in short dollar positions today. EUR/GBP stalled again today at 0.8805 and slipped back to 0.8720, helping keep the pound well supported against the dollar. We end the week at 1.5950.
Have a great weekend all. We’ll be sure to check in with whatever buzz comes out of the IMF meetings…
