North American Job numbers beat all expectations. Hands down, US and Canadian data were much better than expected. The +204k reported stateside pushed US yields higher, while the uptick in the unemployment rate to +7.3% was explained away by the US partial government shutdown last month. The net effect probably puts the prospect of a Fed taper closer to December rather that at the end of Q1 2014. CTA's have been dominating the selling along the US fixed income curve, with the long-end obviously leading the rout. The dominant trading strategy involves adding more 'steepeners' to investor's portfolios.
For the "mighty" dollar - it has had many reasons to rally over the past few weeks. The Fed gave it support when policy makers delivered an unexpected positive economic outlook last month. US domestic data has improved – stronger manufacturing reports have been delivered. Throw into the mix the ECB's surprise rate cut this week (interest rate differential) and add a robust US GDP report gives investors enough reasons to want to own more USD's. Obviously topping the pile is Friday's NFP report. With information overload prominent it will probably take a few more trading sessions to allow the dust to settle somewhat before the USD can probably kick on to greater heights.
In Canada, the unemployment rate stayed at its 5-year low of +6.9% after the economy added another +13.2k jobs in October. The six-month average now hovers around the +23k watermark. The loonie lost some of its footing outright, mostly on the back of its largest trading partners surprise employment report. However, thus far the CAD has performed admirably against the crosses. Fulltime added +16k employees while part-time shred -2.7k jobs. The participation rate is little changed and is straddling +66.4%
- Gold Might Slow Drop as China Plenum Gets into Gear -
- NFP Reports Shows US Added 204k Jobs in October -
- U.S. Dollar Remains Steady Before Jobs Data -
- U.S. Economy Expands at 2.8% -
- Gold Rises After ECB Cut Only To Drop with US Positive Data -
- US Retail Sales Rise in October -
- Canada’s Ivey Purchasing Index Rises in October -
- U.S. Dollar near Two Month High -
- Gold Rises As USD Drops -
- US Business Spending Was Hit by Political Shutdown -
- Fed’s Bullard: No hurry to Taper Because of Low Inflation -
- Schiff Maintains Bullish Gold Outlook -