NFP has Investors Range Trading

Friday’s US payroll release has given helicopter Ben the ideal “wait and see” release and plays right into policy maker’s current way of thinking. Despite a net +115k jobs being created last month, the final print has still managed to undershoot the streets expectations by -53k. Chairman Bernanke has been very open and rather vocal with the market on how the US recovery has been painfully slow. Perhaps we should not be surprised with the outcome? Even the March and February upward revisions by a combined +53k, providing a zero sum game for the past three-months, has not stopped risk aversion trading strategies currently being implemented. The release neither raises nor lowers the bar for QE3. If anything, until there is more proof of an economic substance, expect investors to endure further range trading in the short run.

Below are some other highlights of the week:


  • CAD: February’s GDP headline print dropped an unhealthy -0.2%, m/m, after a +0.1% advance in January. The release leaves the Canadian economy tracking well below Governor Carney’s quarter release of +2.5%. Growth for the Q1 will likely come in at +2% or less, even if there is a rebound in March. This will be viewed as a potential U-turn in renewed interest rate hike thinking that came about after the market got itself all bulled up after the hawkish comments from Carney last week. The Canadian economy has some ways to go to adhere to the BoC recent forecasts.
  • USD: Regional factory surveys suggest an April slowdown. However, it seems that National ISM reports are trumping them. ISM Manufacturing PMI rallied to 54.8 last month (53) and was able to drag other sub-components, like production and employment, higher.
  • USD: During the midweek, the US data was not so hot. ADP release of its estimates for US private sector payrolls growth for April came in at +119k positions created, well below expectations of a +175k print.
  • USD: Another sign of uneven US recovery this week was new bookings for factory goods falling -1.5% in March as expected (largest fall in three years).
  • USD: Economic activity in the non-manufacturing sector grew in April for the 28th consecutive month. The non-manufacturing ISM registered +53.5% in April, -2.5% points lower than the +56% March print.
  • USD: The highly anticipated NFP report did not disappoint the market, it gave us volatility and that is something that forex asset class requires after five weeks of complacency. However, the underlying data is disappointing. April’s weaker +115k NFP print adds worries to the US outlook. Analysts were looking for a +175k print. The unemployment rate falling to +8.1% provided some good optics; however, the mathematics for the fall is not good reading. There were +522k counted out of the US work force last month-How is this good? Over the last year there were +2.74m pushed or left out of the workforce while +975k went into it.
  • CAD: A weaker than expected Ivey PMI release (52.7 vs. 61.0 expectation) is finally capable of pressurizing the loonie outright. Obviously the week ending in full risk-off mode after NFP is helping its northern neighbor’s currency to test some key support levels as the big dollar heads towards parity.


Europe Week in FX

ASIA Week in FX



  • Week starts with the ever important Greek and French Elections
  • AUD and CAD deliver building data
  • Trade data is released in CNY, AUD, CAD and USD
  • Inflation numbers are presented in CHF, CNY, GBP and USD
  • Employment numbers are released in AUD, USD and CAD
  • GBP has rate and manufacturing announcements
  • NZD and AUD has annual budgets to present
  • The CHF have foreign currency reserves to disclose
  • JPY delivers its Current Account
  • USD ends the week with Consumer sentiment


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis 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