Non Farm Payrolls
Friday night saw NFP figures released, printing 227K Vs 175K expectation. A higher participation rate saw unemployment tick up to 4.8% – generally seen as a ‘good’ reason for an unemployment increase. A 0.2% lower than expected ave hourly earnings overshadowed the strong headline. The Feds focus on wage growth (which over the past decade has ranged between approx. 1.5 – 3.5) resulted in the weak AHE number dragging on the US dollar and well and truly cooled ideas of the fed hiking in March.
90 Day Immigration Ban
The US Department of Justice emergency appeal to restore the presidents January 27 immigration order, barring citizens from seven Muslim countries and temporarily banning refugees, was denied over the weekend.
Japanese Bonds
Disappointed by a proposed marginal increase to stimulus by the Bank of Japan, Friday saw Japanese Government 10-year bonds (JGBs) test the Banks program to keep 10-year bond yields at zero. As the yield on Friday reached 0.155%, the BOJ intervened by swiftly buying up bonds to suppress any further rise in yields (buying bonds decreases yield, which offers continued growth opportunities for the Japanese economy). As a result USD/JPY price action picked up during the session, offering traders an opportunity to initially, long, then short the pair.
The Week Ahead
Reserve Banks kick into gear this week. Both Australia (Tues) and New Zealand (Thurs) announce their Official Cash rates this week. Expectations are for rates to remain unchanged at 1.50% and 1.75% respectively. RBA Governor Lowe will speak at an evening Economic Forum dinner on Thursday (AEST), with the Monetary Policy Statement released the following morning.
Other high impact announcements:
Mon 6 Feb: AUD Retail Sales m/m. EXP 0.3%
Fri Feb 10th: China Trade Balance. EXP 295B
Fri 10 Feb: GBP Manufacturing Production m/m. EXP 0.3%
