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US employment and earnings to determine market direction – Lloyds Bank

Research Team at Lloyds Bank, suggests that the US employment data today will now govern the markets sentiment and direction into the beginning of next week.

Key Quotes

“Expectations are for around 190k, which is in-line with the ADP release on Wednesday. But earnings are just as important as the headline rate, which disappointed last month. With the recent weakness in the USD and US yields, a weaker data set would have less of an impact we feel than if the data surprised to the upside.”

Research Team at Lloyds Bank, suggests that the US employment data today will now govern the markets sentiment and direction into the beginning of next week.

(Market News Provided by FXstreet)

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EUR/SEK under pressure ahead of Riksbank – Danske Bank

FXStreet (Edinburgh) – Jens Pedersen, Senior Analyst at Danske Bank, sees the krona still vulnerable in light of next week’s Riksbank meeting.

Key Quotes

“EUR/SEK continued its march higher and the market is now pricing in around 8bp for the Riksbank meeting on 11 February”.

“We expect the Riksbank to cut by 10bp and hence the easing is broadly priced. Expect EUR/SEK to stabilise ahead of 9.50 and gradually head lower”.

Jens Pedersen, Senior Analyst at Danske Bank, sees the krona still vulnerable in light of next week’s Riksbank meeting…

(Market News Provided by FXstreet)

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US Non-farm Payrolls Preview: Decline in employment seen in January

FXStreet – The US non-farm payroll data will be released today at 13.30 GMT. Markets broadly expect to see a fall in employment in January. The jobs report in the past three months had shown substantial increase in employment. The unemployment rate has held steady at 5 per cent for some time indicating a robust labor market. However, the wage growth has not risen on expected lines and participation rate was noted to have stayed low.

Markets expect non-farm payroll to have increased by 190k, down from 292k rise seen in December. The ISM PMI released this week showed continuous weakness in the manufacturing sector. It also showed employment in the manufacturing sector dropped to a six-and-a-half year low in January, thereby raising the fear that overall employment rate has probably dropped in the month of January ahead of the jobs report. The index measuring employment fell to 45.9 from 48.0,marking the lowest reading since June 2009. Economists had expected the reading to come in at 48. It is being feared that the overall payrolls might not have increased 190k in January as is being broadly estimated. Unemployment rate can be expected to dip to 4.9 per cent.

Nomura believes that the public sector job gains seen in late 2015 were mainly on account of stronger demand for postal service workers during the holiday season. With the holiday season over hiring in this sector can be expected to have returned to a more moderate rate. Also, they expect jobs in the manufacturing sector to have dropped by 5k. It also likely that hiring in the construction sector which had grown in the later half of 2015 on account of warm weather, has receded as the warm weather conditions have been noted to be moving back to what is considered normal for this time of the year. Most of the job gain will be seen in the service providing sector, according to Nomura. Analysts at Nomura however expect average hourly earnings to rebound by 0.31% m-o-m (2.25% y-o-y) after declining slightly in December.

Research team at RBS forecast non-farm payroll growth of 180K in January, below the consensus figure and well below December’s 292K increase. RBS sees decline in jobs mainly in three sectors likely transportation and warehousing, professional business services, and government employment. Like Nomura, RBS also believes average hourly earnings in January likely rose around 0.3 per cent month on month.

13 major banks have put forth their forecast on January’s non-farm payroll and all of them expect to see a fall in employment within the range of 170K to 245K. Unemployment rate, according to some may dip to 4.9 per cent after holding steady at 5 per cent for years now. Goldman Sachs expect to see a fain of 170k. The unemployment rate, they feel will likely remain unchanged at 5.0% while average hourly earnings are likely to rise at 0.4% month-over-month. SocGen has sounded a little more confident than its peers stating that it expects payrolls to increase by 245k. It expects the unemployment rate to come in at the 4.9 per cent, a level that monetary policymakers generally associate with full employment. ANZ on the other hand expect payrolls to rise by 194k in January, and the unemployment rate is forecast to remain unchanged at 5.0%.

The economic indicators that have been released ever since the Fed’s first rate hike in a decade in December, have not been impressive. US Consumer Price Index (CPI) slipped 0.1 per cent in December after remaining unchanged in November. The fall was primarily the result of a drop in prices of energy goods. Also, rise in the price of services remained moderate. Durable goods order fell. ISM manufacturing index dropped in January. PMI figures showed slack. These factors led New York Fed President William Dudley to state that subsequent rate hikes will be further delayed.If today’s data disappoints it will be certain that Fed will push its next rate hike further into the future. The Fed had in December said it intended to raise rates four times this year. Now that seems completely impossible given the current state of affairs.

The US non-farm payroll data will be released today at 13.30 GMT. Markets broadly expect to see a fall in employment in January. The jobs report in the past three months had shown substantial increase in employment. The unemployment rate has held steady at 5 per cent for some time indicating a robust labor market. However, the wage growth has not risen on expected lines and participation rate was noted to have stayed low.

(Market News Provided by FXstreet)

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US Non-farm payrolls review: What to expect of EUR/USD?

FXStreet (Mumbai) – The EUR/USD caught a bid wave earlier this week, courtesy of which the pair is up more than 350 pips from the weekly low. The immediate focus now is on the all important US non-farm payrolls figure for January.

USD under pressure

After a long time the greenback is heading into the payrolls release on a weaker footing. The offered tone around USD gathered pace earlier this week after Fed’s Dudley expressed concern regarding the negative effect of the global downturn on US economy. Furthermore, markets do not see the Fed moving rates higher in 2016.

Overall, the picture is quite gloomy for the USD bulls. Hence, a weaker-than-expected figure could help the EUR extend bullish move. The momentum could receive an additional boost if the equity markets react negatively to the decreased of the Fed rate hike following a weaker-than-expected payrolls figure.

Meanwhile, a positive surprise could turn out to be a reason for profit taking on EUR longs ahead of the weekend. Apart from the headline number, the unemployment rate and average weekly earnings could play their part as well in determining the dollar movement. However, the main focus would undoubtedly be on the headline figure.

EUR/USD Technical Levels

The spot is sitting just below 1.12 levels. The immediate resistance is seen at 1.1236 (38.2% of Mar low-Aug high) ahead of the major hurdle at 1.1293 (23.6% of May 2014 high-Mar 2015 low). A break higher could be seen if the NFP is horribly weak and the equities react negatively. The spot could aim higher to 1.14 levels in such case. On the other hand, a break below 1.1132 (hourly 50-MA) could bring next support at 1.1055 (200-DMA) in play. A break lower would expose 100-DMA at 1.0966.

The EUR/USD caught a bid wave earlier this week, courtesy of which the pair is up more than 350 pips from the weekly low. The immediate focus now is on the all important US non-farm payrolls figure for January.

(Market News Provided by FXstreet)

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US NFP: What’s in store from January print – ING

Rob Carnell, Chief International Economist at ING, suggests that the latest ADP survey posted a respectable 205k gain on the previous month, which tallies quite well with the consensus expectation for a payrolls figure of about +200k.

Key Quotes

Unfortunately, the ADP survey is not all that reliable, and the non-manufacturing ISM (which posted a sharp dip in the employment index has almost no value as a directional indicator of payrolls) and we probably need to think a little further than the run of hi-frequency information.

Towards the end of last year, there was plenty of anecdotal evidence of rapid hiring. This was not exactly panic hiring, but it did seem to be up a couple of notches up from previous months. Was there a scrabble to get people onto the books before the end of the year? Certainly the temporary help supplied jobs in December were up sharply.

It could be that December was an aberration, not the beginning of a new trend, and that would certainly be in keeping with the run of other data since then. If so, then we might expect this month or next to provide some payback to take us back to whatever the true underlying trend of jobs growth is. If the trend is closer to 250k than 300k, then we might need to see payrolls come in close to the consensus 200k.

But equally, trend payrolls was closer to 200k before the 4Q15 pick-up, and if this is where genuine labour demand lies, then it will require a figure closer to 150k to bring hiring back into line.

The jury is still out with respect to what exactly is happening to US demand. Labour market trends will respond only with a lag to changes in activity, and may continue to run strong for some months even if we are facing some slowdown in activity.”

Rob Carnell, Chief International Economist at ING, suggests that the latest ADP survey posted a respectable 205k gain on the previous month, which tallies quite well with the consensus expectation for a payrolls figure of about +200k.

(Market News Provided by FXstreet)

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GBP/USD needs to close above 1.4680 – UOB

In view of the research team at UOB Group, GBP/USD needs to close above 1.4680 in order to shift to a bullish outlook.

Key Quotes

“There is no change to our view wherein only a daily closing above the major 1.4680 resistance would indicate the start of a sustained up-move in GBP”.

“In the meanwhile, the undertone still appears to be slightly positive as long as the strong support at 1.4490 continues to hold”.

In view of the research team at UOB Group, GBP/USD needs to close above 1.4680 in order to shift to a bullish outlook…

(Market News Provided by FXstreet)

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GBP/USD subdued in the low-1.4500s

The demand for the sterling remains subdued on Friday, relegating GBP/USD to trade in red figures in the 1.4530/25 band for the time being.

GBP/USD weaker ahead of NFP

The pair is retreating for the second consecutive session so far after being rejected from yesterday’s tops at 1.4670. However, despite today’s drop, spot is closing the week with gains after five consecutive pullbacks, helped by a significant retracement in the greenback.

It seems spot is still suffering the dovish tone struck by the BoE at its Quarterly Inflation Report on Thursday, along with the unanimous MPC vote favouring an unchanged monetary policy, all collaborating with renewed market expectations of a rate hike in mid-2017.

GBP/USD levels to consider

As of writing the pair is down 0.40% at 1.4527 with the next support at 1.4353 (23.6% Fibo of 1.5240-1.4079) followed by 1.4147 (low Jan.29) and then 1.4079 (low Jan.20). On the other hand, a breakout of 1.4670 (high Feb.4) would aim for 1.4730 (55-day sma) and finally 1.4796 (61.8% Fibo of 1.5240-1.4079).

Trade Nonfarm payrolls with FXStreet – Live Coverage

The demand for the sterling remains subdued on Friday, relegating GBP/USD to trade in red figures in the 1.4530/25 band for the time being…

(Market News Provided by FXstreet)

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European stock markets mid session: stocks traded higher as market participants are awaiting the release of the U.S. labour market data later in the day

Stock indices traded higher as market participants are awaiting the release of the U.S. labour market data later in the day. Analysts expect that U.S. unemployment rate is expected to remain unchanged at 5.0% in January. The U.S. economy is expected to add 190,000 jobs in January, after adding 292,000 jobs in December.

Meanwhile, the economic data from the Eurozone was mixed. Destatis released its factory orders data for Germany on Friday. German seasonal adjusted factory orders declined 0.7% in December, missing expectations for a 0.5% decrease, after a 1.5% rise in November.

The drop was driven by a decrease in domestic orders. Foreign orders increased by 0.6% in December, while domestic orders dropped by 2.5%.

New orders from the Eurozone declined 6.9% in December, while orders from other countries climbed 5.5%.

Orders of the intermediate goods decreased by 2.0% in December, capital goods orders were down 0.5%, while consumer goods orders climbed 4.3%.

According to the French Customs, France’s trade deficit narrowed to €3.94 billion in December from €4.53 billion in November, exceeding expectations for a decline to a deficit of €4.4 billion. November’s figure was revised up from a deficit of €4.63 billion.

Exports declined 0.9% in December, while imports dropped 2.2%.

On a yearly basis, exports rose 1.8% in December, while imports gained 2.9%.

In 2015 as whole, the trade deficit fell to €45.7 billion from €58.3 billion in 2014.

Current figures:

Name Price Change Change %

FTSE 100 5,930.8 +32.04 +0.54 %

DAX 9,426.21 +32.85 +0.35 %

CAC 40 4,260.24 +31.71 +0.75 %

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France’s current account deficit is €0.7 billion in December

The Bank of France released its current account data on Friday. France’s current account deficit was €0.7 billion in December, down from a deficit of €1.5 billion in November. November’s figure was revised down from a deficit of €1.4 billion.

The trade goods deficit narrowed to €1.1 billion in December from €2.6 billion in November, while the surplus on services fell to €0.1 billion from €0.8 billion.

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