European Session: Waiting on NFP

 @ibtimes on December 04 2009 5:32 AM

Market Brief

      Risk appetite was muted in Asian session ahead of the US labor data. European equity markets are broadly lower, following Asia's lukewarm session. Overall, we expect a quiet morning with thin volumes and tight ranges. Oil and gold were 1% lower, while EURUSD consolidated between 1.5040-1.5140 and USDJPY traded between 88.00-88.50. Perhaps the only FX chart of interest would be the USDMXN, which finally broke support at 12.810 putting the next significant level at 12.000. We are seeing leveraged accounts building long USDJPY positions, as rumor swirl over Japanese government potentially selling US treasuries and theories over intervention. While we don’t subscribe to this specific market gossip, we do expect the JPY to continue to depreciate.

      The main event of the day is clearly US NFP. Markets are expecting a -125k drop and the unemployment rate to hold steady at 10.2%. We are slightly more optimistic (due to seasonal factors and recent encouraging economic data) and are expecting a figure south of -100k. Recently, it has become very difficult to gauge the markets reaction through the USD. Sometimes the greenback responds negatively to positive news while other times the reverse. Trading specially risk correlated crosses, such as the AUDJPY, hold a more direct cause and effect relationship.

      Also of note will be the economic data out of Canada . The unemployment rate is expected to remain unchanged at 8.6% and 15k net change in employment. And in other data, the Ivey PMI is expected to decrease slightly to 60.0. The encouraging news should help the USDCAD focus back on to 1.0345 support.

G10 Advancers and Decliners vs USD

GBP

0.32

width=61.9354838709677

JPY

0.11

width=21.2903225806452

NZD

0.01

width=1.93548387096774

width=19.3548387096774

EUR

-0.10

width=23.2258064516129

DKK

-0.12

width=27.0967741935484

CHF

-0.14

width=32.9032258064516

AUD

-0.17

width=54.1935483870968

NOK

-0.28

width=75.4838709677419

CAD

-0.39

width=120

SEK

-0.62

 Global Indexes

 Current Level

 % Change

Nikkei 225 Index

10,022.59

+ 0.45

Hang Seng Index

22,498.15

- 0.24

Shanghai Index

3,317.04

+ 1.60

FTSE 100 Index

5,296.02

- 0.31

DAX Index

5,746.72

- 0.40

SMI Index

6,419.58

- 0.38

S&P future

1,099.60

+ 0.14

 World Markets

 Current Level

 % Change

Gold

1,204.40

- 0.26

Silver

18.80

- 0.15

VIX

22.46

+ 6.34

Crude wti

75.93

- 0.69

USD Index

74.68

- 0.16

 Todays Calender

 Estimates

 Previous

 Country / GMT

ECB Executive Board member Bini Smaghi partecipate

--

--

EUR / 12.30

Net change in employment, thous Nov

15.0

-43.2

CAD / 13.30

Unemployment rate, % Nov

8.6%

8.6

CAD / 13.30

Change in nonfarm payrolls, thous Nov

-125K

-190

USD / 13.30

Unemployment rate, % Nov

10.2%

10.2

USD / 13.30

Average hourly earnings, % m/m (y/y) Nov

0.2

0.3 (2.4)

USD / 13.30

Average weekly hours Nov

33.1

33

USD / 13.30

Factory orders, % m/m (y/y) Oct

0.0

0.9,-17.1

USD / 15.00

Philadelphia Fed President Plosser (FOMC non-voter

--

--

USD / 15.00

ivey Purchasing Managers index

60.0

61.2

CAD / 15.00

St. Louis Fed President Bullard (FOMC non-voter) t

--

--

USD / 18.15

Currency Tech

AUDUSD R 2: 0.9405 R 1: 0.9320 CURRENT: 0.9254 S 1: 0.9095 S 2: 0.8945

USDCAD R 2: 1.0620 R 1: 1.0585 CURRENT: 1.0571 S 1: 1.0465 S 2: 1.0430

EURJPY R 2: 134.00 R 1: 133.55 CURRENT: 132.78 S 1: 131.45 S 2: 130.65

USDMXN R 2: 12.870 R 1: 12.725 CURRENT: 12.626 S 1: 12.559 S 2. 12.405

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