Week in FX Americas – Jobs Here, Jobs There, Jobs Everywhere

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%


WEEK AHEAD

* CNY New Yuan Loans
* GBP Consumer Price Index
* GBP Bank of England Inflation Report
* JPY Gross Domestic Product
* EUR German Gross Domestic Product
* EUR Euro-Zone Gross Domestic Product s.a.
* USD U.S. Senate Banking Committee Confirmation Hearing for Yellen
* EUR Euro-Zone Consumer Price Index

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Dean Popplewell

Dean Popplewell

Vice-President of Currency Analysis and Research at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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