- Canadian employment rises 27,100; much stronger than expected; unemployment rate rises to 8.7%
- US nonfarm payrolls fall 216,000; unemployment rate rises sharply, to 9.7% from 9.4%; mixed
- ECB’s Weber: No need for easier monetary policy; too early to end expansive policy
- ECB’s Stark: Outlook patchy
- Roubini: No USD collapse near-term; potentially for collapse if debt levels not addressed
- Pimco’s ElErian: Rising possibility of double dip
- ECRI weekly index rises to 38 year high
- Chinese FinMin: “Sound momentum of economic recovery” in China- Reuters
- US wins WTO case over Airbus subsidies
- S&P 500 gains 1.3% to 1016; gold closes little changed at $994.
- US 10-year note rises 8 bp to 3.44%
It took the market a while to sort through the data and come to a consensus but the dip in lost payrolls, offset by a rise in the unemployment rate led traders to conclude that little has changed in a macro sense so they would stick with their macro view that a slow global recovery is underway. Under those circumstances, sexier currencies are in fashion rather than the doudy old dollar.
AUD/USD did a star-turn today, jumping through 0.8470/80 resistance and flying through barriers at 0.8500 with surprising ease. Upbeat comments from China’s finance minster that recovery momentum will be sustained into next year helped spur AUD higher. EUR/USD, EUR/JPY and GBP/USD all worked higher before Asian selling in EUR/USD around 1.4320/25 helped end the surge. AUD/USD reached 0.8535 and looks set to close well north of 0.8470/80 support.
USD/JPY saw wild volatility in the wake of the US data. It slumped to 82.27 from 92.90 only to rally to 93.25 all in the space of about 5 minutes. It then settled into a 92.90/00 range for almost the entire US session. Buying of EUR/JPY helped keep the pair underpinned near 93.00 as did firmer US bond yields and improved risk appetites.
Cable firmed up to the 1.6410 area in the early US afternoon and closed near its highs. Offers are seen at 1.6410/15 but stops are eyed i the 1.6415/20 area. Bid are eyed at 1.6380 initially.
USD/CAD slumped after strong Canadian employment data. Selling of USD/CAD by reserve managers was heard following the US data, driving the pair down from the 109.70 region to 1.0830 before stalling.
