MORNING BRIEFING: Investors eye US jobs data, first decline of 2010 expected

[RTFX-Trading]

MORNING BRIEFING: Investors eye US jobs data, first decline of 2010 expected
    
What’s new?
Forex: Euro urges above $1.25 as US data sparks worries
UK: Sterling hits 2 month high versus Dollar
Japan: New BoJ member Morimoto warns’ of strong Yen’s impact
Germany: German banks safe in EU stress tests say regulatory sources
United States: Non-farm payrolls today at 14:30 CET

Today:


Overnight Rates and Indices:
EURUSD: 1.2531 – 1.2482
USDCHF: 1.0635 – 1.0584
GBPUSD: 1.5198 – 1.5151
EURJPY: 110.41 – 109.47
USDJPY: 88.21 – 87.54
DowJones: 9’732.53 -0.42%
NASDAQ: 2'101.36 -0.37%
S & P 500: 1'027.37 -0.32%
Nikkei: 9’203.71 +0.13%
Shanghai 2'384.66 +0.46%
Gold: $ 1’209.10
Crude Oil: $ 72.94

Comment:

EURUSD bounced as the Euro successfully navigated several risk events while US economic data concurrently disappointed. The Euro surged to a five-week high above $1.25 on Thursday, while the Dollar fell broadly after disappointing data raised worries the US economic recovery is stalling.

Concerns about Euro zone debt and liquidity problems eased further on Thursday after Spain successfully sold 3.5 billion euros of a five-year bond, adding to positive sentiment a day after European banks borrowed less money than expected from a European Central Bank tender.

For the first time in a long time bad US data actually lead to a weaker Dollar. That is a new development as in the past year or so, negative news in the market triggered risk aversion which always supported the greenback.  The reasons could be that investors are simply exiting their positions due to the renewed risk aversion or because interest rate expectations are back in play.

With a US recovery in doubt the Fed might not move rates until 2012, which might lead to a selloff of equities, commodities and the Dollar. Investors are now awaiting the US employment report later in the day which is expected to show a decline of 110,000 in non-farm payrolls, the first fall this year. Non-farm payrolls are expected at 14:30 CET.

Good Weekend

Emman Xuereb
Trading Desk
RTFX Ltd
Risk Disclaimer