Market Brief
The greenback is stronger against all of its G10 peers before the US jobs data. The optimistic expectations (NFPs expected at 230K vs. 217K last) keep traders positioned long in US dollars. The US 10-year yields are however softer today (2.2411-2.2517%).
USD/JPY finally broke 120-resistance, rallied to 120.25 on stops. Tokyo closes the week on green note (Nikkei +0.19%), the profit takings and corrective shorts will likely be the challenging on the upside before December 14th snap elections. Once the volatilities around 120 ease, we expect sustainable advance, traders already shift targets to 130s. Option bids are placed at 119.00/119.75/120.00/120.50/121.00 for today expiry. US nonfarm release will define the tone toward the closing bell: correction or extension?
Yesterday’s major highlight has been the ECB meeting and the President Draghi’s press conference. As expected the ECB maintained status quo and Mario Draghi gave a dovish speech. Yet not sufficient for the EUR-bear appetite. EUR/USD spiked down to 1.2280, then rebounded to 1.2456. Unable to close above 1.2435/50 (yesterday MACD pivot / 21-dma), we keep our bearish bias and remain seller on rallies. Option positions are mixed at 1.2400/50 area, we see better appetite above 1.2470 today. The US NFPs should determine whether EUR/USD will make a second day of bull attempt or not. A week close below 1.2420 (MACD pivot) will keep the bias on the downside.
EUR/GBP partially pared weekly losses on EUR gains, as no surprise came out of the BoE meeting. The bearish momentum weakened however the short term technicals have not reversed yet. Option related offers trail below 0.7955/0.7900 before the week’s closing bell.
USD/CAD resistance is building at 1.14+. Canada also releases jobs and trade data today, the expectations are less optimistic then in the US. Trend and momentum indicators are marginally positive. We target a break above 1.1467 (year high) as long as 21-dma (currently at 1.1329) support holds. EUR/CAD seeks fresh direction. A breakout of 1.4065/1.4176 range (MACD pivot / 50-dma) is needed for fresh positions.
The key highlight of the day is the US labor data: the change in November manufacturing, private and nonfarm payrolls, unemployment and participation rate and wages. Traders also watch German October Factory Orders m/m & y/y, Swiss November Foreign Currency Reserves, Spanish October Industrial Output m/m & y/y, Swedish November Budget balance, October Service and Industrial Production m/m & y/y, Norwegian October Industrial Production and Manufacturing m/m & y/y, Euro-zone 3Q (Prelim) GDP q/q & y/y, Euro-zone 3Q Gross Fix Capital, Government Expenditures and Household Consumption q/q, Canadian October International Merchandise Trade, Canadian November Unemployment and Participation Rate, US October Trade Balance, Factory Orders and Consumer Credit.
| Today's Calendar | Estimates | Previous | Country / GMT |
|---|---|---|---|
| GE Oct Factory Orders MoM | 0.50% | 0.80% | EUR / 07:00 |
| GE Oct Factory Orders WDA YoY | 0.00% | -1.00% | EUR / 07:00 |
| SZ Nov Foreign Currency Reserves | 465.5B | 460.4B | CHF / 08:00 |
| SP Oct Industrial Output NSA YoY | - | 3.60% | EUR / 08:00 |
| SP Oct Industrial Output SA YoY | 1.50% | 1.00% | EUR / 08:00 |
| SW Nov Budget Balance | - | -6.3B | SEK / 08:30 |
| SW Oct Service Production MoM SA | 0.00% | 0.80% | SEK / 08:30 |
| SW Oct Service Production YoY WDA | - | 4.30% | SEK / 08:30 |
| SW Oct Industrial Production MoM | 0.50% | -1.10% | SEK / 08:30 |
| SW Oct Industrial Production NSA YoY | 0.20% | -4.30% | SEK / 08:30 |
| SW Oct Industrial Orders MoM | - | -1.00% | SEK / 08:30 |
| SW Oct Industrial Orders NSA YoY | - | -2.10% | SEK / 08:30 |
| NO Oct Industrial Production MoM | - | 4.40% | NOK / 09:00 |
| NO Oct Industrial Production WDA YoY | - | 7.70% | NOK / 09:00 |
| NO Oct Ind Prod Manufacturing MoM | 0.40% | -2.10% | NOK / 09:00 |
| NO Oct Ind Prod Manufacturing WDA YoY | - | 2.10% | NOK / 09:00 |
| UK Nov BoE/GfK Inflation Next 12 Mths | - | 2.80% | GBP / 09:30 |
| EC 3Q P GDP SA QoQ | 0.20% | 0.20% | EUR / 10:00 |
| EC 3Q P GDP SA YoY | 0.80% | 0.80% | EUR / 10:00 |
| EC 3Q Gross Fix Cap QoQ | -0.20% | -0.30% | EUR / 10:00 |
| EC 3Q Govt Expend QoQ | 0.20% | 0.20% | EUR / 10:00 |
| EC 3Q Household Cons QoQ | 0.30% | 0.30% | EUR / 10:00 |
| CA Oct Int'l Merchandise Trade | 0.15B | 0.71B | CAD / 13:30 |
| US Nov Change in Nonfarm Payrolls | 230K | 214K | USD / 13:30 |
| CA Nov Unemployment Rate | 6.60% | 6.50% | CAD / 13:30 |
| US Nov Two-Month Payroll Net Revision | - | - | USD / 13:30 |
| CA Nov Net Change in Employment | 0.0K | 43.1K | CAD / 13:30 |
| US Nov Change in Private Payrolls | 225K | 209K | USD / 13:30 |
| CA Nov Full Time Employment Change | - | 26.5 | CAD / 13:30 |
| US Nov Change in Manufact. Payrolls | 15K | 15K | USD / 13:30 |
| CA Nov Part Time Employment Change | - | 16.5 | CAD / 13:30 |
| US Nov Unemployment Rate | 5.80% | 5.80% | USD / 13:30 |
| CA 3Q Labor Productivity QoQ | -0.20% | 1.80% | CAD / 13:30 |
| CA Nov Participation Rate | 66 | 66 | CAD / 13:30 |
| US Nov Average Hourly Earnings MoM | 0.20% | 0.10% | USD / 13:30 |
| US Nov Average Hourly Earnings YoY | 2.10% | 2.00% | USD / 13:30 |
| US Nov Average Weekly Hours All Employees | 34.6 | 34.6 | USD / 13:30 |
| US Nov Underemployment Rate | - | 11.50% | USD / 13:30 |
| US Nov Change in Household Employment | 350 | 683 | USD / 13:30 |
| US Nov Labor Force Participation Rate | - | 62.80% | USD / 13:30 |
| US Oct Trade Balance | -$41.2B | -$43.0B | USD / 13:30 |
| US Oct Factory Orders | 0.00% | -0.60% | USD / 15:00 |
| US Oct Consumer Credit | $16.450B | $15.924B | USD / 20:00 |
Currency Tech
EUR/USD
R 2: 1.2532
R 1: 1.2456
CURRENT: 1.2382
S 1: 1.2280
S 2: 1.2168
GBPUSD
R 2: 1.5826
R 1: 1.5763
CURRENT: 1.5656
S 1: 1.5586
S 2: 1.5423
USD/JPY
R 2: 121.00
R 1: 120.50
CURRENT: 120.15
S 1: 119.10
S 2: 117.89
USD/CHF
R 2: 0.9839
R 1: 0.9796
CURRENT: 0.9712
S 1: 0.9650
S 2: 0.9595