Intraday Market Thoughts

AUD/JPY at 4-Year High Ahead of Jobs

by Adam Button
Apr 11, 2013 0:08

AUD/JPY is in a precarious spot ahead of today's Australian employment report. On Wednesday, the Australian dollar climbed again while the yen lagged. Other reports include Japanese machine orders and second-tier inflation data. This evening's new Premium trades include USDJPY (with tactical rationale of manoeuvring the next sessions), GBPUSD, AUDUSD, EURJPY and USDCAD. Both EURUSD trades remain in progress. All is found in the latest Premium Insights.

AUD/JPY heads into today's employment report riding a 5-day, 800+ pip wave of excitement about the Bank of Japan QE program. On Wednesday, the pair blasted through the 2008 highs and is now within striking distance of the all-time high set in 2007.

The risks are double because last month's employment report was the strongest in 12 years as the economy added a whopping 71.5K jobs. The massive gain left economists scratching their heads with estimates ranging from +15K to -55K. The consensus has settled around -7.5K but after last month's gain there is the risk of a big miss. The numbers will be released at 0130 GMT (2:30 London). Earlier releases include the Japanese CPGI and Feb Japanese machine tool orders, which are expected up 6.9%.

On Wednesday, the Australian dollar rally was fuelled by the risk trade as the S&P 500 gained 1.2% and broke the all-time high set in 2007.

The market was caught off guard by an early release of the FOMC minutes after a leak yesterday. The minutes showed an FOMC that sounded surprisingly eager to taper asset purchases. It's important to keep in mind that the minutes were before the latest round of soft economic numbers.

In any case, the gold market was the only thing seriously jarred by the report, as the metal dropped $25 to $1558.

Act Exp Prev GMT
Employment Change s.a. (MAR)
-50.0 71.5K Apr 11 1:30
Fulltime employment (MAR)
17.8 Apr 11 1:30
Part-time employment (MAR)
53.7 Apr 11 1:30
Unemployment Rate s.a. (MAR)
5.4% 5.4% Apr 11 1:30

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