Intraday Market Thoughts

Talk, Stocks and Payrolls

by Adam Button
Mar 5, 2013 23:22

A risk in the ISM non-manufacturing index led to a short-lived jump in the US dollar on Tuesday. The Australian dollar coasted through the day as the best performer while CHF lagged. Late-breaking news that Venezuelan President Huge Chavez has died adds some potential pitfalls in an Asia-Pacific session that features Australian GDP.  We issued a nNew set of Premium Insights ahead of the RBA decision and a string of other central bank decisions (BoC, BoE and ECB). New trades on USDJPY, GBPUSD and AUDUSD have been issued to the Latest Premium Insights.

The Dow broke its 2007 record high after an upbeat report on the services sector. The ISM gauge rose to 56.0 from 55.0 expected. The forward-looking new orders component also jumped to 58.2 compared to 54.4 previously.

The employment component of the survey is generally a solid predictor of non-farm payrolls and it was at 57.2 which is consistent with NFP above 200K. The current consensus is 160K.

The US dollar climbed 40 pips against the yen and euro after the figures but was unable to sustain its momentum and most of the gains have evaporated. On the day, overall market changes were minimal.

The death of Chavez isn't a surprise after years of fighting cancer. His #2, Nicolas Maduro had a strong anti-US tone earlier in the day, saying Chavez' cancer was deliberately planted by imperialist attackers.

Oil was sedate after the news but could rise on signs of instability in Venezuela.

Australian GDP data is the only event on the Asia-Pacific calendar but continued comments from the incoming BOJ governor and deputies will also be closely scrutinized.

The release is at 2330 GMT and the consensus is for 0.6% quarter-over-quarter growth and 3.0% year-over-year. That's a slight bump from 0.5% expansion in Q3.

Act Exp Prev GMT
ISM Non-Manufacturing Index
56.0 55.0 55.2 Mar 05 15:00
Australia Net Exports of GDP (4Q)
0.6 0.5 0.1 Mar 05 0:30
Gross Domestic Product (Q4) (q/q)
0.6% 0.5% Mar 06 0:30
Gross Domestic Product (Q4) (y/y)
3.0% 3.1% Mar 06 0:30

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