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ASIA FX MARKETS OPEN
FRIDAY, JULY 4, 2014
NFP LIFTS USD, NOT ENOUGH TO BREAK RANGES
Market Briefs
• DJIA closes above 17k for first time, S&P 500 hits fresh record
• US Non-Farm Payrolls Jun +288k, f/c 212k, +224k-prev
• US Private Payrolls Jun +262k, f/c 210k, +224k-prev
• US Manufacturing Payrolls Jun +16k, f/c 10k, +11k-prev
• US Government Payrolls Jun+26k, 0k-prev
• US Unemployment Rate Jun6.1%, f/c 6.3%, 6.3%-prev
• US Average Earnings MM Jun 0.20%, f/c 0.2%, 0.2%-prev
• US Average Workweek Hrs Jun34.5h, f/c 34.5h, 34.5h-prev
• ECB leaves rates unchanged
• Draghi ECB interest rates will stay low for an extended period, unanimous in its commitment to use unconventional instruments if needed, Annual HICP inflation expected to remain at low levels over the coming months, see inflation gradually rise in ‘15/’16, ECB is interested in promoting ABS to heal impairment of bank lending channel
• Weidmann wrong to speculate about further measures immediately after June decisions, concerned that low rates are easing pressure on govt’s to reform consolidate budgets
• BOE’s Cunliffe BOE more willing to use interest rates to tackle bubbles than before crisis
• Swedish FinMin Borg says we have reason to be worried about household indebtedness
• Moody’s Mexican states face growing pressure from pension liabilities
• US International Trade MM $ May-44.39b, f/c -45.0b, -47.04b-prev
• US Initial Jobless Claims w/e 315k, f/c314k, 313k-prev
• US Jobless Claims 4-Wk Avg w/e 315.00k, 314.50k-prev
• US Continued Jobless Claims w/e2.579m, f/c 2.563m, 2.568m-prev
• US Markit Comp Final PMI Jun 61, 58.4-prev
• US Markit Svcs PMI Final F Jun 61, 61.2-prev
• US ISM N-Mfg PMI Jun 56, f/c 56.3, 56.3-prev
• US ISM N-Mfg Bus Act Jun 57.5, f/c 61, 62.1-prev
• US ISM N-Mfg Employment Idx Jun 54.4, 52.4-prev
• US ISM N-Mfg New Orders Idx Jun 61.2, 60.5-prev
• US ISM N-Mfg Price Paid Idx Jun 61.2, 61.4-prev
• CA Trade Balance C$ May-0.15b, f/c -0.25b, -0.96b-prev
• CA Exports C$ May 44.17b, f/c ]43.40b, 42.66b-prev
• CA Imports C$ May44.32b, f/c 43.70b, 43.62b-prev
• BR HSBC Services PMI Jun 51.4, 50.6-prev
• BR HSBC Composite PMI Jun49.9, 49.8-prev
• BR CNI Factory Utilization* May80.7%, 81.1%-prev
Looking Ahead – Economic Data (GMT)
• No Significant Data
Looking Ahead – Events, Other Releases (GMT)
• No Significant events
Currency Summaries
EUR/USD Tight ranges held in Europe again. The one rally toward 1.3665 was thwarted and the pair drifted lower as EZ Service PMIs were generally softer than f/c. The pair slid near 1.3650/55 into NY’s open and sat there into the ECB decision. As expected there was no change from the ECB and EUR/USD was static until the US jobs. The jobs data was well above f/c and prior readings were revised upwards although wage growth was tepid. The USD and US bond yields took off. EUR/USD plummeted but held short of breaking the June 27 low. Draghi’s presser began shortly after the jobs data. He reiterated that rates will stay low for an extended period, outlined the TLTRO and noted that the GC is unanimous in its commitment to use unconventional measures if needed. EUR/USD dipped lower again & hit a 1.3596 low. No further losses were possible though as US yields gave back some early gains after the 10 year couldn’t breech the 200-DMA. Traders lighted up shorts on that as the US has a long w/e coming up. The pair lifted to 1.3620 before settling just below 1.3610 late in the day.
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