New York Session
Published: January 7, 2010 5:33 PM
Trading in the NY session was characterized by ranges. Economic data was nothing to write home about as US initial jobless claims pretty well printed in line with expectations. The read just above 430K is consistent with a small gain in NFP and we are looking for tomorrow's blockbuster number to come in above consensus at +19K. Euro was choppy all session as the pre-employment consolidation took hold. The pair went as high as 1.4350 and as low as 1.4300 as supranational names were buying dips while the macro community ostensibly continued to build short positions.
USD/JPY was also range-bound as the 93.40 area contained the strength while moves towards 93.00 found better buyers waiting in the wings. The pair looks to be forming a pennant on the hourly charts and the chatter on the desks is that everyone is eyeing the 93.50 barrier as the next critical trigger for a move higher. Remember that the new Japanese Finance Minister noted that companies in Japan would be more comfortable with a rate near 95 â€ so this could be just the beginning.
Some obvious weakness was seen in the Canadian dollar. Comments out of a respected economic think-tank that the Bank of Canada will remain on hold until the June 2010 line in the sand weighed on the currency. The fact that the Ivey PMI report came in below expected, and under the 50 level that signifies growth, did not help matters. USD/CAD rallied from 1.0290 intraday lows to sit near 1.0350 as we write. It looks like we need a break above 1.0400/10 now to see the upside continue. Remember that Canadian employment is out at 7am ET tomorrow (ahead of the 830am NFP release) and a weaker than anticipated number could be the catalyst for the move higher.