Market Roundup
- Dollar regains some ground against euro after U.S. jobs data.
- U.S. bond prices rise in volatile session, US equities +1.9%.
- Oil drops after OPEC maintains output despite oversupply.
- U.S. Nov nonfarm payrolls rise by 211k vs forecast +200k, Oct revised higher.
- U.S. trade deficit widens as exports hit three-year low.
- Fed’s Harker backs December rate hike, to keep econ on track & protect Fed credibility.
- ECB rate cut brings EUR 750 billion back into bond-buying bucket.
- ECB’s Draghi: FX rates important, not a policy target; package not meant to address market expectations.
- ECB’s Constancio: markets got it wrong in forming their expectations.
Looking Ahead – Economic Data (GMT)
- 22:30 Australia AIG Construction Index * Nov 52.1-previos
- 23:30 Japan Reuters Tankan DI*Dec 3-previous
- 23:50 Japan Foreign Reserves* Nov 1244.20b-previous
- 05:00 Japan Coincident Indicator MM*Oct -0.3-previous
Looking Ahead – Events, Other Releases (GMT)
- 03:45 Japan- BOJ Gov Kuroda & Bank of France Deputy Gov Anne Le Lorier to speak at the Europlace forum
Currency SummariesEUR/USD is likely to find support at 1.0800 levels and currently trading at 1.0870 levels. The pair has made session high at 1.0952 and hit lows at 1.0828 levels. The U.S. dollar traded flat against the euro on Friday despite better than expected US payrolls data, as markets continued to digest Thursday’s unexpectedly action from the European Central Bank on stimulus measures. U.S. nonfarm payrolls edged up to 211,000 last month, the Labor Department said on Friday. September and October data was revised to show 35,000 more new jobs than first reported. The dollar gained against the yen and Swiss franc, however, which helped boost the U.S. dollar index. The dollar was last up 0.29 percent at 122.960 yen, and was last up 0.41 percent against the Swiss franc at 0.99700 franc. The euro was last down just 0.1 percent against the dollar at $1.09290. The dollar index, which measures the greenback against a basket of six major rivals, was last up 0.47 percent at 98.077. To the upside, immediate resistance can be seen at 1.0902. To the downside, immediate support level is located at 1.0828 levels.GBP/USD is supported in the range of 1.5059 and currently trading at 1.5105 levels. It reached session high at 1.5149 and hit low at 1.5080 levels. Sterling slipped lower against the dollar on Friday, but was still on track to record its steepest loss against the single currency since 2009, after the European Central Bank eased policy significantly less than expected. The single currency surged across the board on Thursday after the ECB surprised the market expectations, cutting its deposit rate by just 10 basis points and extending its asset purchases by six months, but not increasing the total monthly amount. Against the dollar, sterling was 0.3 percent lower on Friday at $1.5106. It slipped earlier in the week after both manufacturing and construction data came in worse than expected, though data from the dominant services sector was robust. In contrast to the ECB, the U.S. Federal Reserve now looks almost certain to raise interest rates by the end of the year, after data showed U.S. job growth increased solidly in November, boosting the greenback. To the upside, immediate resistance can be seen at 1.5109. To the downside, immediate support level is located at 1.5060 levels.AUD/USD is supported around 0.7280 levels and currently trading at 0.7338 levels. It hit session high at 0.7383 and made session lows at 0.7323 levels. The Australian dollar held near recent peak against dollar on Friday with further easing by the European Central Bank (ECB) putting them on track to end the week sharply higher against their U.S. counterpart. They were not so lucky against the euro which was swept up in a massive short squeeze after the ECB proved less aggressive than many bears were betting on. The Australian dollar held at $0.7332, having climbed to an 8-week peak of $0.7365 on Thursday. Heavy resistance was found at the Oct. 12 trend high of $0.7382. The ECB put its deposit rate deeper into negative territory and extended its asset buying by six months. Still, it disappointed markets which had expected a bolder stimulus package and set a fire under the euro. The euro was last at A$1.4890, having surged from a five-month trough of A$1.4368 on Thursday. In contrast to the ECB, the U.S. Federal Reserve now looks almost certain to raise interest rates by the end of the year, after data showed U.S. job growth increased solidly in November, boosting the greenback. To the upside, immediate resistance can be seen at 0.7380. To the downside, immediate support level is located at 0.7280 levels. USD/CAD is supported at 1.3341 levels and is trading at 1.3377 levels. It has made session high at 1.3416 and lows at 1.3316 levels. The Canadian slipped against the U.S. dollar Friday after contrasting U.S. and Canadian employment data, while crude oil fell as OPEC sources said the group would likely maintain their policy of pumping near-record volumes of oil. Oil prices fell after OPEC sources said the group, whose ministers were meeting in Vienna, planned to keep pumping oil at near-record levels, even as a global crude glut has depressed prices. Meanwhile, Canada lost more jobs than expected last month, sending the unemployment rate up slightly and erasing the temporary boost the labor market had seen from October’s federal election, data from Statistics Canada showed on Friday. The economy shed 35,700 jobs in November, handily exceeding economists’ forecasts for a loss of 10,000 jobs. The unemployment rate ticked up to 7.1 percent, also defying expectations for it to hold steady at 7 percent. To the upside, immediate resistance can be seen at 1.3380. To the downside, immediate support level is located at 1.3340 levels.Equities RecapEuropean shares edged lower on Friday, resuming its losses from the previous session when the European Central Bank’s new stimulus measures disappointed some investors, with oil stocks leading the fall.UK’s benchmark FTSE 100 closed down by 0.73 percent, the pan-European FTSEurofirst 300 ended the day down by 0.30 percent, Germany’s Dax ended down by 0.4 percent, France’s CAC finished the day down by 0.33 percent.U.S. stocks rallied on Friday, giving the S&P 500 its biggest gain since early September, as U.S. jobs data suggested the economy was strong enough to sustain a Federal Reserve rate hike this month.Dow Jones closed up by 2.09 percent, S&P 500 ended up by 2.02 percent, Nasdaq finished the day up by 2.06 percent.Treasuries RecapYields on U.S. Treasuries fell on Friday, with investors caught between a stronger-than-expected November jobs report that built the case for an interest rate hike and a drop in oil prices after OPEC surprisingly raised its production ceiling.U.S. 2-year Treasury notes rose 2/32 in price to yield 0.922 percent, down from 0.958 percent late on Thursday. It reached 0.994 percent, its highest since May 2010 on Thursday.Benchmark 10-year Treasury notes were last up 10/32 in price to yield 2.292 percent, down from a yield of 2.328 percent late on Thursday. The 30-year bond rose 15/32 in price to yield 3.050 percent, down from a yield of 3.073 percent late Wednesday.Commodities RecapOil prices fell on Friday after news that the Organization of Petroleum Exporting Countries was planning to maintain its production near record highs despite depressed prices, as the producer group continued to guard its share of an oversupplied market.Brent crude oil futures fell 84 cents, or nearly 2 percent, to settle at $43, after rising in early trade. The benchmark was within cents of August’s 6-1/2-year trough.U.S. crude futures fell $1.11, or nearly 2 percent, to settle at $39.97.Gold rose more than 2 percent to the highest in nearly three weeks on Friday after a U.S. non-farm payrolls report, seen as likely to pave the way for the U.S. Federal Reserve to raise interest rates this month, failed to aid the dollar’s ascent.Spot gold weaker initially, rose as much as 2.5 percent to its highest since Nov. 16 at $1,088.70 an ounce and was up 2 percent at $1,082.96 an ounce by 2:24 p.m. EST (1924 GMT). It was on track for a 2.3 percent gain for the week, following six weeks lower.
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