Market Roundup
- US Non-Farm Payrolls Aug +173k, forecast- 220k, +245k-previous.
- US Unemployment Rate Aug 5.1%, forecast- 5.2%, 5.30%-previous.
- US Average Earnings MM Aug 0.3%, forecast- 0.2%, 0.20%-previous.
- US Average Workweek Hours Aug 34.6h, forecast- 34.5h, 34.5h-previous.
- Dollar mixed as Fed moves still uncertain after U.S. jobs data.
- US' Lew told China's Lou China should let Yuan reflect fundamentals, avoid persistent FX misalignments, and refrain from competitive devaluations.
- Fed's Lacker: Jobs data 'good,' doesn't change outlook for rate hikes.
- G20 vows transparency on rate moves as global growth disappoints.
- G20 communiqué drafters reject EM push to cast rate hikes as risk.
- ECB's Nowotny says ABS-buying scheme less successful than hoped.
- Brazil IGP-DI Inflation Index* Aug 0.4%, forecast- 0.3%, 0.58%-previous.
- Wall St banks shift odds on hike to YE, median prob for Sep hike falls to 40% from 60% in June
Looking Ahead - Economic Data (GMT)
- 23:30 Australia AIG Construction Index Aug 47-previous
- 23:50 Japan Foreign Reserves Aug 1242.30b-previous
- 05:00 Japan Coincident Indicator MM* Jul 0.7-previous
- 05:00 Japan Leading Indicator* Jul 1.2-previous
Looking Ahead - Events, Other Releases (GMT)
- 05:00 (Sat) German Finance Minister Wolfgang Schaeuble and ECB Governing Council member Jens Weidmann hold a press conference at G20 meeting.
Currency Summaries
EUR/USD is likely to find support at 1.1090 levels and currently trading at 1.1151 levels. The pair has made session high at 1.1174 and hit lows at 1.1090 levels. The dollar stood mixed on Friday, as data showing U.S. unemployment in August at its lowest since 2008 did little to clear away currency markets uncertainties over whether the Federal Reserve will raise rates later this month. Many analysts had tipped nonfarm payrolls data as key for Fed policymakers to take a call on rate hike, the government said nonfarm payrolls increased 173,000 last month as the manufacturing sector lost the most jobs since July 2013. Average hourly earnings increased 8 cents, the biggest rise since January, and the workweek rose to 34.6 hours. The jobless rate declined 0.2 percentage point to 5.1 percent, its lowest level since April 2008 and in the range that most Fed officials think is consistent with a low but steady rate of inflation. The Euro peaked to 1.1191 levels in quick succession immediately after the US jobs data was released by labor department, but fell back to resume its yesterday's downward trend, after market digested the data. The pair hit session lows a 1.1089 and later it recovered to trade around 1.171 levels in the late US session. To the upside, immediate resistance can be seen at 1.1174. To the downside, immediate support level is located at 1.1138levels.
GBP/USD is supported in the range of 1.5090 levels and currently trading at 1.5179 levels. It reached session high at 1.5258 and dropped to session low at 1.5161 levels. Sterling slipped to a three-month low against the dollar on Friday, after soft data from the UK further weakened the Sterling raising more doubts in investors mind that the Bank of England will raise interest rates soon. Sterling failed to gain much traction, however, especially since data on Thursday indicated that Britain's dominant services sector had grown in August at its weakest pace in more than two years. Manufacturing and construction sector surveys also fell short of expectations, prompting some economists to revise down their growth forecasts for the third quarter. Sterling extended losses to US dollar after a key U.S. jobs report kept alive expectations that the Federal Reserve could raise rates perhaps as early as this month, the Sterling slipped to $1.5183, its lowest level since June 5, and was on its way for second straight week of losses. To the upside, immediate resistance can be seen at 1.5218. To the downside, immediate support level is located at 1.5140 levels.
USD/JPY is supported around 118.19 levels and currently trading at 119.02 levels. It peaked to hit session high at 119.48 and made session lows at 118.76 levels. Japanese yen slipped against US dollar on Thursday, after Data from the Labor Department on Friday showed that non-farm payrolls rose to 173,000 last month, a slowdown from July's upward figures of 245,000. However, a drop in the unemployment rate to a near 7-1/2-year low and acceleration in wages kept alive prospects of a Federal Reserve interest rate increase later this month. With global stock and currency markets reeling under constant pressure over the last two weeks, the report is probably the best and last direct reading on the economy as Fed officials weigh whether to hike rates at a much-anticipated meeting on Sept. 16-17. The greenback repeatedly fluctuated between gains and losses in-between the range of 119.54 and 118.91 against Japanese yen during New York session, after the market stabilized the greenback finally gave up gains to trade below 119 levels in the late American hours. To the upside, immediate resistance can be seen at 119.48. To the downside, immediate support level is located at 118.57 levels.
USD/CAD is supported at 1.3187 levels and is trading at 1.3262 levels. It has made session high at 1.3324 and lows at 1.3234 levels. Canada's dollar slipped sharply against its U.S. counterpart on Friday as markets digested mixed U.S. and Canadian employment data for August. Canada added 12,000 more jobs last month, which exceeded the economist's prediction of a loss of 4,500 jobs. But the unemployment rate climbed to 7 percent, the highest in a year, after having held steady at 6.8 percent for half a year. U.S. job growth printed less than expected figures in August at 173k against the forecast of 220k, the unemployment rate dropped to a near 7-1/2-year low of 5.1 percent and hourly earnings rose to 0.3 against forecast of 0.2. The Canadian data, alongside trade and economic growth reports earlier this week, is unlikely to persuade the Bank of Canada for another interest rate cut, which may not be necessary at this time. The loonie traded between C$1.3160 and C$1.3239 in Friday's session.The Canadian dollar initially rallied after the data from 1.3278 levels to hit high at 1.3160 it's strongest level of the session, but quickly pared gains and weakened off sharply to reach 1.3239 levels in the mid-American session. To the upside, immediate resistance can be seen at 1.3288. To the downside, immediate support level is located at 1.3245 levels.
Equities Recap
European shares ended the week lower after jobs data from the United States triggered selling pressure as investors try to gauge the timing of the next U.S. rate hike.
UK's benchmark FTSE 100 closed down by 2.3 percent, the pan-European FTSEurofirst 300 ended the day down by 2.4 percent, Germany's Dax ended down by 2.5 percent, France's CAC finished the day down by 2.5 percent.
U.S. stock indexes ended down more than 1 percent on Friday after a mixed August jobs report did little to quell investor uncertainty about whether the Federal Reserve will increase interest rates this month. Dow Jones closed down by 1.67 percent, S&P 500 ended down by 1.54 percent, Nasdaq finished the day down by 1.07 percent.
Commodities Recap
Crude futures fell about 2 percent on Friday as traders paid little heed to a drop in the number of U.S. rigs drilling for oil and focused instead on a supply glut and declining stock prices on Wall Street.
Brent slid $1.15, or 2.2 percent, to $49.53 a barrel by 2:40 p.m. EDT (1840 GMT). It was up 9 percent on the week.
U.S. crude settled down 70 cents, or 1.5 percent, at $46.05. It was up 1.7 percent on the week, after last week's near 12 percent gain, the biggest since 2011.
Gold prices fell towards a second weekly loss on Friday after U.S. payrolls data failed to allay uncertainty over the prospect of a near-term interest rate hike from the Federal Reserve.
Spot gold was down 0.4 percent at $1,120.80 an ounce at 2:49 p.m. EDT (1849 GMT), while U.S. gold futures for December delivery settled down 0.3 percent at $1,121.40. The metal is on track to fall for a second week.
Treasuries Recap
U.S. medium- and long-dated Treasuries prices rose on Friday, while prices for short-dated notes were mostly flat, after U.S. monthly employment data bolstered the case for the Federal Reserve to hike interest rates later this month.
Benchmark 10-year yields hit a more than one-week low of 2.11 percent, while 30-year yields hit their lowest level since Aug. 31 at 2.88 percent. Two-year note yields were last little changed on the day at 0.7 percent.U.S. 30-year Treasuries were last up 1-1/32 in price to yield 2.89 percent, from a yield of 2.95 percent late Thursday.
