Jobs Worries Resume, IMF Funding in Focus

Another disappointing report on initial jobless claims fanned the QE3 flames. GBP was the top performer on the day while JPY lagged. The upcoming session is quiet, save for the Japanese tertiary industry index. Thursday's Premium Intermarket Insights charts the periodicity of Eurozone bailouts and has trading ideas on EURUSD, EURJPY and more below.

Initial jobless claims at 386K were well above the 370K expected. The previous report was also revised higher to 388K from 380K. At the same time, existing home sales fell 2.6%, well below to +0.5% consensus.

The reaction was a fall in USD/JPY and a rally in gold as the market priced in a renewed chance of QE3. The soft jobless claims report is the second in a row but it may have been skewed by the Easter holiday. A third consecutive miss would raise concerns at the Fed and about the durability of the US recovery.

Early in US trading a rumor about a French downgrade sparked a fall in EUR/USD to 1.3070 but as officials denied the chatter, the euro climbed back above 1.3150.

European stocks continued to decline, including a 2% fall in Spanish stocks pushing them to a 2-year low. The S&P 500 fell 0.6% to 1377.

The focus now shifts to the IMF meetings in Washington. A draft communiqué said significant downside risks still remain but made no mention of increased funding. The IMF hoped to raise $600 billion to give it the firepower to deal with a potential European disaster but US opposition means it will likely fall short with estimates around $450 billion in new funding. A total of $350 billion has already been pledged but China and other developing nations are expected to kick in the rest.

The lone event on the Asia-Pacific calendar is Japan’s tertiary index for February at 2350 GMT. The consensus is for a 0.7% rise after a 1.7% decline in February.

Thursday’s Premium Intermarket Insights charts the periodicity of Eurozone bailouts and has trading ideas on EURUSD, EURJPY, AUDUSD, USDCAD, gold, and US crude oil. For direct access to these ideas, direct access is found here: http://ashraflaidi.com/products/sub01/access/?a=628 Non Subscribers, can click here to join: http://ashraflaidi.com/products/sub01

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