Market Roundup
- U.S. Sept nonfarm payrolls rise by 142,000 vs forecast- 203k, +136k-previous, adds to global growth concern.
- US Average Earnings flat vs forecast- 0.2%, 0.4%-previous.
- Wall St reverses early weakness on energy stock rally; jobs data arouses growth concerns.
- U.S. bond prices jump after disappointing jobs report, end NY well off highs.
- Fed's Fischer: monetary policy tools other than interest rate such as bank RRs could be studied as macro-pru tool.
- Fed's Bullard rebuts calls to delay rate increase; inflation reasonably close to target.
- Fed's Bullard sees follow-up rate increase after liftoff critical for Fed's credibility.
- Fed's Kocherlakota fed should not act to choke off job creation in absence of inflation.
- Traders see US hike in early '16 based on FF futures, BNP/BNY eye US liftoff in Mar '16.
- Brazil's Rousseff cuts 8 ministries to cut costs, reshuffles cabinet to consolidate power.
- Weak Mexican peso could fuel inflation: central bank board member Sanchez.
- Mexico says Microsoft plans major investment in Mexico approx. 1 billion USD b/w 2015 & 2018.
Looking Ahead - Economic Data (GMT)
- 22:30 Australia AIG Services Index Sep 55.6-previous
- 23:30 Australia TD-MI Inflation Gauge Sep 0.1%-previous
- 00:30 Australia ANZ Newspaper Job Ads Sep 0.8%-previous
- 00:30 Australia ANZ Internet Job Ads Sep 1%-previous
- 01:30 Japan Overtime Pay Aug 0.6%-previous
Looking Ahead - Events, Other Releases (GMT)
Currency Summaries
EUR/USD is likely to find support at 1.1190 levels and currently trading at 1.1217 levels. The pair has made session high at 1.1318 and hit lows at 1.1200 levels. The dollar slumped against euro on Friday, stung by a September U.S. jobs report depicting slower hiring that added to doubts the economy was strong enough for the Federal Reserve to raise U.S. interest rates later this year. Non-farm payrolls printed 142,000k last month and August figures were revised sharply lower to show only 136,000 jobs added, the U.S. Department of Labor said on Friday. The dollar's losses against the euro topped 1 percent before partly recovering, and the dollar index was off nearly 0.40 percent after touching its lowest since Sept. A weaker than expected U.S. employment report for September published on Friday, diminished inflation expectations, and the prospects for a dim U.S. corporate earnings season, are all factors fanning worries that the economic recovery could be derailed. The euro was last up 0.3 percent against the dollar at $1.1230. To the upside, immediate resistance can be seen at 1.1240. To the downside, immediate support level is located at 1.1190 levels.
GBP/USD is supported in the range of 1.5140 levels and currently trading at 1.5178 levels. It reached session high at 1.5237 and dropped to session low at 1.5176 levels. Sterling inched higher against the dollar after a poor set of U.S. jobs numbers on Friday, but the latest blow to an already weak global growth outlook undermined it against the euro and may do so further next week. Sterling, along with the greenback, has been the main beneficiary of expectations some of the developed world's big central banks may be able finally to start raising interest rates. But after the negative U.S. payrolls numbers the Federal Reserve could hold on rate hike decision until 2016, and not December as many have been expecting, pricing for a rise by the Bank of England was also shoved back to the end of next year. Sterling was up 0.5 percent on the day at $1.5204, off a high of $1.5238 seen immediately after the payrolls numbers. The pound returned to highs against the dollar near the range last seen on Monday, but in general it is trading at the bottom end of a range it has held since parliamentary elections in May. To the upside, immediate resistance can be seen at 1.5200. To the downside, immediate support level is located at 1.5140 levels.
USD/JPY is supported around 119.70 levels and currently trading at 119.95 levels. It made session high at 120.12 and made session lows at 118.64 levels. The US Dollar slipped sharply against Japanese yen on Friday after the U.S. labor department released data which showed the economy created 142,000 jobs in September, well short of the 203,000 forecast, and August numbers were revised sharply lower to show only 136,000 jobs. Soon after data release the dollar hit a three-week low against the yen, however in the mid new york session dollar recovered all the lost ground to trade around 119.85 levels. The data marked the smallest two-month gain in employment in over a year and may fuel fears that a China-led global slowdown is sapping America's economic strength. The report may lead to a change of view among some Fed policymakers, including Fed Chair Janet Yellen, who have said the U.S. central bank would end its near-zero interest rate policy if the economy shows further improvement. The payrolls report also showed hourly wage growth stalled, undermining some Fed officials' outlook for inflation to pick up in the coming months. The dollar hit lowest level at 118.65 after the U.S. data, and its strongest level in the session was 119.86. To the upside, immediate resistance can be seen at 120.10. To the downside, immediate support level is located at 119.75 levels.
USD/CAD is supported at 1.3140 levels and is trading at 1.3160 levels. It has made session high at 1.3245 and lows at 1.3155 levels. The Canadian dollar rallied to a two-week high against its U.S. counterpart on Friday following dismal U.S. labor market data that raised fresh doubts the U.S. economy was ready for an interest rate hike this year. Hiring outside of farming climbed by 142,000 in September, well below the 203,000 analysts had predicted. August figures, already below forecast, were revised sharply lower. The disappointing numbers sent the greenback down sharply, hitting a two-week low, against a basket of key currencies including the loonie. Federal Reserve officials have been signaling that they planned to hike interest rates for the first time in nearly a decade by the end of the year, but Friday's soft employment numbers could fuel concerns that the U.S. economy may be dragged by a China-led global economic slowdown. The loonie hit C$1.3184 after the U.S. data, its strongest level in two weeks. Its weakest level of the session was C$1.3253. U.S. jobs data sent equities and oil prices lower. Canadian jobs data for September will be released next Friday. August trade data and Ivey PMI figures for Canada are due next Tuesday. To the upside, immediate resistance can be seen at 1.3175. To the downside, immediate support level is located at 1.3110 levels.
Equities Recap
European shares closed higher on Friday, as firmer utility stocks and gains on the Lisbon bourse before weekend elections in Portugal propped up markets in spite of weak U.S. jobs data.
The pan-European FTSEurofirst 300 index ended up 0.4 percent, UK's benchmark FTSE 100 closed up by 0.9 percent, Germany's Dax ended up by 0.3 percent, France's CAC finished the day up by 0.7 percent.
U.S. stock indexes jumped over 1 percent on Friday as worries about the economy after a disappointing jobs report gave way to a robust rally in energy and materials stocks.
Dow Jones ended up by 1.22 percent, S&P 500 ended up 1.42 percent, Nasdaq finished the day up 1.72 percent.
Treasuries Recap
U.S. Treasury debt prices rose on Friday with benchmark yields falling to their lowest in 5-1/2 weeks as a surprisingly weak U.S. jobs report for September reduced economists' expectations that the Federal Reserve will raise interest rates this year.
Benchmark 10-year Treasuries notes were up more than 1 point in price to yield 1.925 percent, down 12 basis points from late 30-year bond was up almost 2 points in price with a yield of 2.763 percent, down 9 basis points on the day.
Commodities Recap
Gold jumped more than 2 percent on Friday and silver surged over 5 percent for its best day this year as weaker-than-expected U.S. jobs data dented expectations the U.S. Federal Reserve will raise interest rates this year, triggering short-covering.
Spot gold was up 2.1 percent at $1,136.40 an ounce at 2:58 p.m. EDT (1858 GMT), after rising 2.5 percent to a session high of $1,141.50. U.S. December gold futures settled up $22.90 an ounce, or 2 percent, at $1,136. were down 0.8 percent on the week.
Crude prices erased early losses to rise by 1 percent or more on Friday after a report showing the fifth weekly decline in the U.S. oil rig count renewed the debate over falling production in the world's top oil consumer.
Brent, the global oil benchmark, settled up 44 cents, or nearly 1 percent, at $48.13 a barrel. U.S. crude rose 80 cents, or 1.8 percent, to $45. the week, Brent was down about 1 percent while U.S. crude fell slightly.
