Intraday Market Thoughts

US Outlook Brightens Ahead of NFP, Latest Premium Insights

by Adam Button
Nov 1, 2012 22:20

Better US economic data boosted risk sentiment but the foreign exchange market remained sideline. Commodity currencies were the exception, making solid gains, while the yen lagged. Markets may be quiet ahead of non-farm payrolls with the BOJ minutes as the lone item on the calendar. A new edition of Premium Insights was released earlier today ahead of the NFP. 6 trades hit all targets last week, 3 were stopped out and 4 remain in progress. Please see below.

The October ADP report showed US employment rising 158K in the month, beating the 135K consensus and adding an upside bias to Fridays non-farm payrolls report. More good news for the jobs market came with initial jobless claims at 363K compared to 370K consensus.

The manufacturing sector also showed unexpected strength with the ISM survey at 51.7K compared to 51.2K expected. The final revision of consumer confidence showed a small tick lower but it was still the best report in more than three years.

The commodity currencies were the chief beneficiaries of the positive reports but neither USD/CAD nor AUD/USD were able to break out of their recent ranges, likely due to apprehension ahead of the US employment report.

The euro rallied to 1.2980 in early US trading but slipped back after a Greek lawmaking unit said Troika-mandated pension law changes may violate the constitution. That sent the euro back to 1.2930.

The S&P 500 gained 1.1% on the day and European stocks posted similar gains but the euro and pound could not take advantage. It may be a sign of underlying weakness.

The calendar is light but features the BOJ minutes at 2350 GMT. At 0030, Australia releases third quarter PPI; expectations are for a +1.2% q/q reading.

Here are the latest Premium Insights ahead of tomorow's US jobs report. 6 trades hit all targets last week, 3 were stopped out and 4 remain in progress. Nonsubscribers can click here to join



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