EU Morning Report – Non Farm payrolls expected to show a loss of 50,000 jobs in the US for the …
Friday, March 5th, 2010Non Farm payrolls expected to show a loss of 50,000 jobs in the US for the month of February!
- The USD traded with a stronger tone yesterday as the jobless claims beat expectations indicating a possible much better than expected NFP report today. Jobless claims had indicated a negative employment trend over the past few weeks however the numbers are thought to reflect the bad weather conditions in the US. The expectations for NFP today are -50K with the range of estimates as wide as 180K. The market is positioned in such a way currently that even if we get a slightly worse reading the USD could still be a good opportunity for long positions. Overall price action for the USDJPY yesterday was between 88.13 – 89.36.
- In the Euro Zone we had the monthly policy meeting and rate decision yesterday followed by Trichet’s press conference. The ECB left rates unchanged and had switched to variable rates for the 6 month tenders. At the press conference Trichet was asked about Greece’s new austerity plans and about IMF assistance. He replied by supporting the current measures adopted by Greece and also dismissing any need for the IMF saying that the EU members will support Greece if needed. He also reiterated US authorities should support a strong dollar. GDP data for Q4 was released yesterday with a 0.1% quarter growth. EURUSD price action yesterday was between 1.3735 – 1.3551.
- In the UK the BoE had its monthly policy meeting, they left the rates unchanged and also left the QE program on pause. No explanation was followed and the market now turns it focus on the BoE minutes in 2 weeks from now.
- In Japan news stories broke out that the BoJ is discussing additional measures for monitory policy easing. That combined with the favorable jobless claims in the US we saw a strong rally in USDJPY, much of the move has been down to nervous short positions ahead of the NFP and BoJ intervention threats.
- Today the main focus will be on the NFP report prior to the US session opening. The expectations are for 50,000 jobs to be lost for the month of February. The market is thought to be oversold as it is bracing itself for the worse given the spell of bad weather recently in the US.
Currency to watch out for: EURUSD & USDJPY
- § The EURUSD pivot point is at 1.3655 with a preference to enter into short positions at 1.3645
- § The USDJPY pivot point is at 88.95 with a preference to enter long positions at 89.00
Today’s calendar and market movers:
- § US Non Farm Payrolls for February expected at -50K
- § UK PPI output expected at 0.2% for the month of February
- § Germany Industrial Orders for January expected at 1.5%
Equity Markets:
- US equities closed positive yesterday with the DJIA and the SP500 closing 0.46% and 0.37% respectively. The European bourses were negative yesterday with the FTSE down -0.11% the DAX and the CAC closing positive at 0.0% and -0.37% respectively. The NIKKEI and the HSI at the time of writing is 2.2% and 0.67% respectively.
Written by Easy-Forex
