Overnight Points of Interest
2013 May 17 by Graham
Good morning
Overnight
# A second consecutive night of weaker than expected U.S data finally took its toll on equity markets. That said, the EuroStoxx600 hung in there, ending essentially flat at -0.03% however stateside bourses succumbed to the weight of the data misses, the S&P500 ending down 0.5%.
# The Philadelphia Fed survey showed manufacturing in the region unexpectedly contracted in May as new orders retreated and factories cut back on employment and hours. The decline was the first in 3 months corroborating other figures this week showing manufacturing in the New York Fed region also unexpectedly contracting.
# U.S. Housing Starts fell more than forecast in April to a five-month low. Housing starts slumped 16.5 %, the most since February 2011, to an 853,000 annualized rate after a revised 1.02 million pace in March. However Building Permits are running at a higher pace suggesting that this is just a pause after a strong recent run and momentum will resume in due course.
# U.S. Inflation numbers showed prices fell 0.4% in April. Excluding food and energy, inflation rose only 0.1%m/m v 0.2% expected.
# U.S. Jobless Claims, gave back some of the sharp gains that saw 5 year lows recorded last week. The data showed 360k of claims, well up from last week’s 328k result.
# As a result the U.S. 10 year bond yield continued the correction to the recent strong run, dropping back to 1.87% from a high of 1.98% earlier in the week.
# European Industry Commissioner Tajani commented that “ Euro is too strong, ECB should manage the currency to help exports” The comment took EUR off its highs sending the single currency half a cent lower.
# The NZD was the weakest of the G-10 pairs as the previous ‘carry trade’ favourites continue to underperform. The kiwi lost ground against all comers but most notably against the USD, falling from 0.8260 to test 0.8160 and against GBP from 0.5425 to 0.5335. In the process the bird traced out ‘bearish engulfing days’ against both suggesting further immediate falls ahead. What’s the old adage for the kiwi…..’up the stairs and down the elevator’?
# Heavy fund selling saw Gold slump again, creating the largest slump in 16 months. Gold fell 0.7% to US$1385.00 and has fallen 17% this year.
# U.S Crude rose 0.9% as the weak jobless claims and deflationary aspect to the U.S CPI number suggested the FED won’t be earlier to ‘taper’.
# The IMF said that global central banks and their extraordinary policies have saved the world but that they could face severe losses when time came to withdraw the stimulus.
Ahead
# NZ Producer Prices
# JapanMachinery Orders
# Universityof Michigan Consumer Sentiment
Have a good weekend and go the Canes and the Blues
G.
BBY (NZ) Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 May 16 by Graham
Good morning
Overnight
# The rally in European andU.S.shares equities continues unabated with the EuroStoxx600 rising to fresh 5 year highs whilst the S&P500 closes at new all-time highs. The bourses closed up 0.79% and 0.51% respectively despite a poor Eurozone GDP read and a set of underwhelmingU.S.data.
#U.S. Industrial Production fell a larger than forecast 0.5%, the most in 8 months.
# The U.S. Empire Manufacturing Index unexpectedly contracted in May, falling into negative territory at -1.43 when +4.0 was expected. The reading was the lowest level in 4 months as employment intentions pulled back and new orders fell.
# To complete the trifecta, U.S. Producer Prices recorded their largest drop in three years as gasoline and food costs tumbled, pointing to weak inflation pressures.
# The one bright light was that confidence amongU.S.homebuilders improved in May for the first time in five months as buyers rush to take advantage of near record-low mortgage rates. The National Association of Home Builders/Wells Fargo index of builder confidence rose to 44 from a revised 41 in April.
# The data bought the run higher in US bond yields to a halt with the benchmark 10 year bond retreating from 2 month highs of 1.98% to 1.93%.
# Advance European Q1 GDP figures were disappointing. The 6th consecutive contraction in Eurozone GDP was slightly larger than expected at -0.2% vs. -0.1% expected with a meagre +0.1%q/q increase in German GDP growth particularly worrying ( +0.3% expected) .
# Under PM Abe’s ‘all in’ program to kick start the Japanese economy, the BOJ announced it will pump ¥2.8t into the money market to “address the rapid increase in longer-term interest rates”. This afterJapan’s 5-year borrowing costs rose aboveGermany’s for the first time in 20 years.
# Gold futures tumbled below $1,400 an ounce, extending the longest slump in almost three months, as the dollar’s rally eroded demand for the metal as an alternative investment. Silver fell to a three-week low. The greenback climbed to a nine-month high against a basket of major currencies. The euro fell to the lowest in almost six weeks against the dollar as the euro-area’s recession extended to a record sixth straight quarter. Gold has declined 17 % this year as some investors lost faith in the metal as a store of value.
Ahead
# Business N.Z. Manufacturing Index
# JapanPrelim GDP
# N.Z. Annual Budget
# JapanIndustrial Production
# Eurozone CPI Data
# U.S.Building Permits
# U.S.CPI
# U.S.Housing Starts
# U.S Philadelphia Fed Survey
Cheers G.
BBY (NZ) Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 May 6 by Graham
Good morning
Overnight
# Equity markets were buoyed by a better than expected U.S employment report, rising solidly to end the week. The EuroStoxx600 ended up 1.06% for a 1.74% gain on the week. Similarly the S&P500 rose 1.05% to end the week up 2.03%, closing at new record highs.
# The U.S. Non-Farm Payrolls figures came out stronger than expected with close inspection showing strength in all facets of the report. The headline jobs growth for April came in at +165k against expected +145k, March’s +88k figure was revised up to +138k, average hourly earnings rose +0.2% and the unemployment rate fell from 7.6% to 7.5% (a Goldilocks number as far as FED action is concerned? – no too hot to inspire ‘tapering talk, not too cold to worry markets…..just right?)
# The data on U.S Factory Orders for March was largely overlooked with the -4% decline not a factor in price action over the evening. The 4 % drop in bookings was the biggest since August and followed a revised 1.9 % gain the prior month that was smaller than previously estimated. Companies appear to be feeling the effects of slowing growth in Europe, Asia and the U.S., where higher taxes and across-the- board federal budget cuts, known as sequestration, have restrained consumer spending.
# U.S. ISM Non-Manufacturing (services) PMI also declined, dropping to 53.1 in April against forecast 54.0 and a previous 54.4. Whilst slowing the report remains in expansionary territory.
# EUR/USD embarked on a wild ride. The pair was grinding higher after an ECB speaker suggested the zone wasn’t ready for negative rates reaching 1.3140 before the payrolls figure saw a plunge to 1.3030 where apparent central bank buying lay in wait which provided the basis for a wicked rebound to as high as 1.3160. the pair eased into the close to end at 1.3125
# Copper produced a stunning rally after weeks of constant selling. The prime industrial metal rose nearly 7%, the biggest 1 day gain since Oct 2011. Besides the mammoth rise in copper – U.S. Crude gained 1.72% on Friday while Gold only gained $4 to US$1,471 due to the betterUSpayroll data washing away expectations the Fed will consider increasing QE efforts. Iron ore eased from 130.40 to 130.22.
# U.S 10 Year Treasury Bond yields surged from 1.63% to 1.74% whilst a similar move was seen in German Bunds with the 10 year yield rising from 1.15% to 1.24%.
Ahead
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 May 3 by Graham
Good morning
Overnight
# Equity markets benefitted from more monetary policy stimulus, this time form the ECB who cut their benchmark rate by 0.25%. The after a topsy turvy session the EuroStoxx600 rallied late to end up 0.32%. The S&P500 forged to new all-time highs, rising 0.94%.
# As was widely expected, in light of the recent stream of poor European data, the ECB cut 0.25% to take its target interest rate to 0.50%. President Draghi did not rule out further action saying the ECB is “technically ready” for negative deposit rates. He also said the ECB was consulting with other parties on ways to stimulate lending, particularly to SMEs. Finally the ECB’s statement emphasised that the risks surrounding the economic outlook for the Eurozone continue to be to the downside.
# The EUR was hit hard on the decision. After initially trying the topside, rallying to 1.3220, the EUR then slumped to sit at 1.3050 this morning.
# After last night’s ECB announcement German 10-year yields dropped to within a whisker of last year’s all-time lows, at 1.16%. Peripheral spreads to German bonds inched lower. Spanish-Italian 10-year bonds spreads narrowed to 290bps, their lowest level since October 2011.
# U.S Jobless Claims unexpectedly fell to a 5 year low with 18,000 less applying for job insurance. The headline drop to 324k contradicts yesterday’s ADP report and sets up an interesting end to the week with the official Non-Farm Payrolls number due tonight where the unemployment rate is expected to stay at 7.6%. (One evolving story is the suspicion that there is an ever growing ‘black/grey’ labour market in the U.S. This line of thinking is built upon the huge drop in the participation rate in recent years (normal participation would suggest unemployment over 10%) but data like retail sales remaining relatively stronger than would be expected).
# Commodities were generally well bid on the double whammy of more global stimulus and better than expected U.S. labour data. U.S. Crude was the standout, tracing out the biggest 1 day gain in 6 months.
Ahead
# AIG Australian Services Index
#ChinaNon-Manufacturing PMI
# Australian PPI
#UKServices PMI
# Eurozone Economic Forecasts
#U.S.Non- Farm Payrolls
#U.S.ISM Non-Manufacturing PMI
# U.S Factory Orders
Cheers and good weekend
G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 May 2 by Graham
Good morning
Overnight
# European shares gave back early gains to end up only 0.07% whilst U.S shares were down from the get go, tried to rally on the FED, but were ultimately undone by a large miss in the ADP private payrolls figure. The S&P500 ended near its lows, down 0.93%.
# The ADP Payrolls figure for April was disappointingly weak coming in at +119k versus expectations of a 150k gain. The gain was the smallest in 7 months and provided more evidence that theU.S.economy is reacting to the recent tightening in fiscal policy and higher taxation. Further, the March figure of +158k was subject to a large negative revision down to +131k.
# The Fed pledged to continue its bond buying program at the $85 bio a month pace, made no mention regarding the previous ‘tapering’ talk and left policy options open saying it is “ready to raise or lower that level as economic conditions evolve”.
# Fonterra’s latest GDT milk auction showed dairy prices fell 7.3% on average from the previous event. This is a correction following the strong 60% surge from December last year to April this year. Despite the drop prices still sit 77% higher than a year ago.
# Commodity currencies took a hit with the NZD amongst the weakest. The NZD/GBP and NZD/EUR now sit toward the lower-end of ranges maintained in recent months.
# The pound (GBP/USD) was well supported by a rare piece of better than expectedUKdata. Whilst still signalling contraction by the narrowest of margins, the UK Manufacturing PMI reading was much better than analysts had expected. The gauge came in at 49.8, up from March’s upwardly revised 48.6, and well higher than the 48.5 expected.
# U.S. Crude tumbled as U.S. oil inventories reached an 82-year high amid signs of economic slowdown in the U.S. and China. Crude retreated $2.43, or 2.6 %, to settle at US$91.03 a barrel, falling the most in 2 weeks.
# Likewise Gold fell the most in 2 weeks. Gold holdings in exchange-traded products plunged 174 metric tons last month, the biggest drop ever, as prices entered a bear market and wiped $17.9 billion from the value of the funds.
Ahead
# JapanMonetary Policy Meeting Minutes
# ANZ NZ Commodity Price Index
# AustralianBuildingApprovals
# HSBCChinaFinal Manufacturing PMI
# Eurozone Final Manufacturing PMI
# ECB Interest Rate Decision
# U.S. Trade Balance
# U.S. Unemployment Claims
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 May 1 by Graham
Good morning
Overnight
# European stocks lost ground on a record Eurozone unemployment number howeverU.S.stocks made moderate gains with the S&P500 rallying to new all-time highs in the last few minutes of the session. The EuroStoxx600 ended down 0.23% whilst the S&P500 rose 0.25%.
# Eurozone unemployment for March rose to 12.1%, the highest since 1995. There is now more than 19 mio people out of work in the combined economic zone. The biggest rise in unemployment was inGreece, where the jobless rate jumped by almost a percentage point in one month to 27.2%. Youth unemployment in the bailed-out nation crept closer to 60%, with 59.1% of 16 to 24-year-olds out of work in January, compared with 58.4% in December.
# Meanwhile Eurozone inflation fell to a 3 year low of 1.2% in April, the biggest monthly drop in more than 4 years. The combined inflation and unemployment data has many analysts expecting an interest rate cut from the ECB this week.
# Spain announced that their economy, the 4th largest in the Eurozone contracted a further 0.5% in Q1, the 7th consecutive decline. The latest figure is in line with Bank of Spain forecasts which predict that Spain’s economy will shrink by around 1.3 % by year end and not begin to return to growth until well into 2014. Embattled Prime Minister Mariano Rajoy was forced to acknowledge that despite stringent austerity measures the nation would need an additional two years to bring its public deficit to within the 3 % limit demanded by European Union partners.
# German Retail Sales fell for a second month in March, adding to signs that Europe’s largest economy is struggling to recover.
# Despite the rotten data the EUR actually rallied against the greenback by as much as 1% at one stage, lifting from 1.3053 to 1.3184.
# The likely catalyst was the Chicago FED PMI which showed manufacturing conditions in the Chicago region contracted for the first time in 3.5 years. The index dropped to 49.0 from 52.4 in the month of April hitting its lowest level since September 2009.
# U.S. Consumer Confidence rebounded in April rising to 68.1% v 61.0 a 5 month high, most probably driven by improving house prices.
# S&P/Case Shiller US house price index a composite index of 20 metropolitan areas rose 1.2%m/m in February, the strongest in six years.
# Apple Inc. set a record for the global bond market with a blockbuster $17bn debt sale on Tuesday as the iPhone maker raised capital to fund its plan to return $100bn to shareholders. While Apple has $145bn of cash on its balance sheet, only $45bn is held in theUS and repatriating foreign reserves would be costly due to tax implications. This has motivated the company to access the US debt market for the first time.
# U.S. 10-year yields touched a 4-month low of 1.64% overnight as falling inflation (the core PCE fell to 1.1% on Monday) and deteriorating economic data has raised speculation the Fed could be a little more dovish this time around (no tapering talk).
# U.S Crude dropped 1.1% ahead of tonight’s stockpiles report which is expected to show ever increasing U.S. reserves.
Ahead
# AIG Australian Manufacturing Index
#ChinaOfficial Manufacturing PMI
# RBA Assist Gov Edey Speaks
#UKManufacturing PMI
# ADP Non-Farm Employment report
#U.S.ISM Manufacturing PMI
# U.S Construction Spending
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 April 29 by Graham
Good morning
Overnight
# Equity markets were predominantly in the red for the most part of offshore trade before late rallies improved the tone. The EuroStoxx600 ended down 0.33% however for the week the gains were an impressive 3.74%. Stateside it was a similar story with the S&P500 ending the day down 0.18% but up 1.7% for the week.
# The U.S. Q1 GDP outcome confirmed the poor tone of recentU.S.data, missing the 3.0% expectation coming in at 2.5%.
# TheUniversityofMichigan Consumer Sentimentsurvey came in better than expected but none the less weaker than a month ago. The reading of 76.4 beat the expected 72.3 but was down from 78.6 in March.
# After a 2 month stalemateItalyhas finally formed a 3 party coalition government. The alliance is one of previous bitter rivals with former premier Berlusconi integral in the mix.
#Spainrevised down its 2013 growth forecast to -1.3% from -0.5%, and optimistically forecast +0.5% growth in 2014.
# The USD/JPY pair bore the brunt of the weaker U.S GDP data falling from 99.50 to 97.50 in the process confirming that the approach to 100.00 has formidable resistance.
Best to worst performing currencies last week
CCY Apr19 Apr26 % change
GBP 1.5230 1.5480 1.64%
JPY 99.50 98.05 1.46%
CAD 1.0270 1.0173 0.94%
NZD 0.8421 0.8475 0.65%
AUD 1.0275 1.0279 0.04%
EUR 1.3111 1.3026 -0.65%
CHF 0.9332 0.9422 -0.96%
# You would have to conclude that a lot of last week’s net/net FX movement was the result of position adjustments rather than fundamental analysis. The IMM data released on Friday showed the speculative community was extremely short the JPY, GBP and CAD heading into last week and they ended up being the best performing currencies by far. The specs were very long the AUD and it ended up underperforming even though equity and commodity markets performed very well in the past week. The EUR lost ground against every currency except the CHF as the run of very poor EZ data has raised expectations the ECB will ease in the coming week.
# Key commodities gave some of the large gains made on Thursday. Copper fell 1.62% and U.S. Crude ended a six-day winning streak to close 0.68% lower. Iron Ore had a bad close to a bad week falling 2.1% to 132.84. Gold was very choppy on Friday and fell sharply after twice failing to break above the 1,480/1,485 level. Gold fell as low as 1,448 after the US GDP data before recovering to close at 1,462 down slightly from 1,466 late Thursday. For the week Copper gained 0.78%, Crude rose 5.42% while Iron Ore ran its own race falling 4.4% on the week. Gold posted its biggest weekly gain in three months, as bargain hunting investors and central banks bought from the extreme lows hit following a capitulation in Gold ETFs. Gold gained 4.18% for the week and is up close to 7% from the April 16 low at 1,321.35.
The week ahead (quite busy!)
Overnight Points of Interest
2013 April 22 by Graham
Good morning
Overnight
# Equity market action Friday appeared to have all the hallmarks of position squaring into the weekend after a week of rather heavy falls. The EuroStoxx600 rose 0.52% to be down 2.46% on the week. The S&P500 rose 0.88% to end the week down 2.1%. The modest gains apparently came on very light volume which is a negative for bulls.
# Ratings agency Fitch cut the UK’s sovereign debt rating to AA+ from AAA, citing a weaker economic and fiscal outlook. But it returned the outlook to “stable”, removing the threat of any further rating action, at least in the near term. This aligns the rating with Moody’s downgrade earlier this year so does not come as a huge surprise.
# The G20 didn’t single out Japan for overseeing a huge fall in the JPY since mid-November when it first became apparent that Abe would be the next Japan PM. If there was criticism of Japan’s policies – the G20 members kept it on the hush-hush. As a result USD/JPY is probing towards 100.00 this morning with the market sensing a ‘green light’ for further JPY weakness. It appears the G20 is less concerned about currency wars and sovereign debt blow-outs and instead want to encourage economic growth initiatives. This is the main reason Japan escaped criticism for at least indirectly pushing the value of the Yen significantly lower.
# Australian Treasurer Swan said the Australian budget has taken a 7.5 BLN AUD “sledgehammer hit” saying the high Australian dollar and falling terms of trade are to blame.
# Italian Parliament elected Napolitano to second term as President with overwhelming majority.
# Best to worst performing currencies last week
CCY Apr5 Apr 12 % change
EUR 1.3111 1.3051 -0.46%
CHF 0.9270 0.9332 -0.67%
GBP 1.5348 1.5230 -0.77%
JPY 98.38 99.50 -1.14%
CAD 1.0137 1.0270 -1.31%
NZD 0.8414 0.8421 -1.91%
AUD 1.0503 1.0275 -2.17%
# Comment – The mood last week was decidedly “risk-off” as equities and commodities sold off in some of the biggest moves since the start of 2013. The USD was the main beneficiary of the move out of risk – as the JPY no longer holds a safe-haven status. Not surprisingly – the “risk/commodity” currencies, the AUD, NZD and CAD were the worst performing.
# Commodities were mixed with gold stabilizing and closing above 1,400 for a 0.95% gain; U.S. Crude rose 0.32% while Copper continued to underperform – falling 1.38% and closing below 7,000 – the first time it had a weekly close below 7,000 in almost three years. Iron Ore fell slightly to 138.43 from Thursday’s close at 138.85. For the week gold fell 5.04%; Brent Crude fell 3.36%; U.S. Crude fell 3.59%; Copper fell 5.82% and Iron Ore fell 2.58%.
# Italian and Spanish bond yields continued to edge lower as yield seeking investors are happy to ignore political and economic negatives for the time being. The 10-year Italian bond yield eased to 4.22% from 4.25% while the 10-year Spanish debt yield closed at 4.63% down from Thursday’s close at 4.66%. Clearly participants here see a much increased chance of a forthcoming rate cut out of the Eurozone.
Ahead
Key data in the week ahead The key US data in the week ahead will be Q1 advanced GDP on Friday, which is expected to come in at a healthy 3.0%. Other US data includes Existing Home Sales; New Home Sales; Durable Goods and Univ of Mich Sentiment Index. Key EZ data includes advances MFG PMI data on Tuesday and German IFO on Wednesday. HSBC Flash China MFG PMI is out on Tuesday and will be a key event in Asia. The BoJ meets again Thursday/Friday and the RBNZ announces on Wednesday.
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 April 17 by Graham
Good morning
Overnight
# European stocks fell despite an upbeat session in the U.S. as the International Monetary Fund lowered its expectations for euro-zone economic growth and German investor sentiment deteriorated sharply. The EuroStoxx600 fell 0.78%, however the S&P500 rose a solid 1.43% to reclaim most of Mondays fall (is the increased volatility the sign of a bear phase?).
# The IMF cut its global economic growth forecast by 0.2% to 3.3%, citing Europe’s persistent recession and the weakening of the U.S. economy. The IMF forecast a sharper euro-area contraction in 2013, with the French economy expected to contract this year instead of expanding however the fund revised German growth expectations up slightly to 0.6% from 0.5%, once again documenting which country has fared best out of the single currency experiment.
# The German ZEW declined for the first time in 5 months, deteriorating sharply to 36.3 from 48.5 in March, well below economists’ forecasts of 41.0.
# Despite the dour news coming out of the Eurozone, the EUR showed only brief downside early in the session, before rallying strongly to be up 1.5 U.S cents this morning at 1.3180 from yesterday’s 1.3030
# Fonterra’s fortnightly Global Dairy Trade (GDT) auction once again drew higher prices, but only just on this occasion. The auction showed an average 0.6% gain in dairy product returns and with prices now 86% higher than a year ago. The annual rise will go a long way to softening the blow of the drought, which to all intents and purposes is now broken with 10 days of predominantly wet weather forecast across NZ.
# The shockingly high U.S inflation number for February (+0.7%) was largely smoothed out by March’s -0.2% release overnight. Indeed U.S prices are now up only +1.5% from a year ago, the smallest annualised rise in 8 months. This result suggests the FED will be in no hurry to ‘taper’ their US$85 bio per month bond purchase program. As an aside, part of the IMF release overnight noted their expectations are for the first FED U.S. rate rise coming in 2016.
# U.S Housing data was mixed with March Building Permits falling unexpectedly (-3.9% from previous +3.9%) whilst March Housing Starts stayed firm with a large positive revision to February’s data to boot.
# U.S Industrial Production rose in March but the data was patchy with a sharp jump in utilities generating heat offsetting overall factory production declining 0.1%.
Ahead
# N.Z. Quarterly Inflation (inflation below the 1-3% band for 9 straight months ?)
# Australian M.I. Leading Index
# U.K. Monetary Policy Meeting Minutes
# U.K. Unemployment
# U.S. FED Beige Book
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnights Points of Interest
2013 April 8 by Graham
Good morning
Overnight
# The Non-Farm Payrolls data out of the U.S sent stocks sharply lower Friday however by the end of stateside trading U.S. bourses had recovered reasonably strongly. The EuroStoxx600 fell a hefty 1.57% and the S&P500, after being down well over 1.0% closed down only 0.43%.
# The U.S payroll data was a mixed bag but the bones of the data were undeniably weak. A rather anaemic 88,000 new jobs were created against an expectation of near 200k. There were two positive data points: jobs gains for February were revised upward to 268,000 from an initial 236,000, and in January to 149,000 from an initial 119,000. However, the real kicker was the participation rate which fell to a 40-year low of 63.3 % last month, from 63.5 % the month before. The unemployment rate fell to 7.6 % from 7.7 %, but only because 496,000 Americans stopped looking for work. Total unemployment remains at about 3 million fewer jobs than at the pre-recession peak. The worry here is that if all the people that could work, returned to looking for work, the unemployment rate would be massively higher.
# The USD was a very mixed bag in the wake of the numbers, hit hard against GBP and EUR, but improving strongly against JPY whilst against the NZD and AUD it was largely unchanged. The AUD weakness, that I’ve been suspecting to arrive, was evident as NZD/AUD rose strongly over the week from 0.8020 to 0.8120 whilst against the EUR the AUD was smashed over the course of the week from 0.8180 to 0.7960.
# The JPY continued to be a major story with USD/JPY now up an incredible 600 points from Thursdays BOJ ‘shock and awe’ announcement. The JPY weakness promoted NZD/JPY to 5 year highs above 82.50.
# Best to worst performing currencies last week
CCY Mar29 Apr5 %Change
CHF 0.9494 0.9355 1.46%
EUR 1.2819 1.2994 1.37%
GBP 1.5191 1.5340 0.98%
NZD 0.8366 0.8432 0.79%
CAD 1.0173 1.0175 -0.02%
AUD 1.0416 1.0378 -0.36%
JPY 94.28 97.56 -3.48%
# Key commodities continued to perform poorly due to global growth concerns – with copper falling 0.46%. U.S. Crude fell 0.60% while Brent Crude fell 2.09% to 104.12 – its lowest daily close since July 24 last year. Gold managed to claw back almost all of the hefty losses incurred earlier in the week, as the promise of on-going Fed QE and the extremely aggressive BOJ QE brought Gold buyers back into the market. Gold stormed 1.85% higher to close at 1,581. Iron Ore was steady – rising 0.22% to 135.90.
# Peripheral debt yields in the Eurozone continued to calm and move lower, as the Cyprus contagion fears continued to fade and investor faith in the ECB to do what is needed encouraged buying of Italian and Spanish bonds. Analysts also noted that the very cheap money on offer from Japan and the US encouraged riskier bond buying. The 10-year Italian bond yield plunged to 4.38% from 4.56% at Thursday’s close – while the Spanish 10-year bond yield fell to 4.76% from 4.93% at Thursday’s close.
# S&P affirms UK AAA rating, outlook remains negative due to outlook for weaker economic
Ahead
http://www.forexfactory.com/calendar.php
Cheers G
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities