Archived IMT (2011.03.04)

WILL US Job report be all about reversal of bad weather effects? US Feb NFP expected at +200K from +36K with the unemp rate at 9.1% from 9.0%. But expectations that negative weather effects would be partially reversed allow for the possibility of seeing +230K-250K in NFP and possibly for the Unemp rate to remain unchanged at 9.0%. Such a scenario would be positive for the USD and broadly negative for JPY. While yen pairs would likely rise across the board, USD dynamics are selective. Traders must watch the reaction in the US 10- year yields and equity futures indices for the markets receptiveness to the data. Recall the disappointing Jan NFP of only +36K led to an actual RISE in US bond yields and decent reaction in stocks because of the 0.4% decline in the unemp rate and the rise in Average Hourly Earnings (AHE) to a 2.5 year high of 0.4%. USD would be especially boosted if AHE pushes further above 0.4%. EURUSD faces further upside towards $1.4070s but the trade with more certainty is prolonged weakness in AUDUSD highlighted by the inability to break 1.02 and EURGBP increased resistance at 0.8590s. CAD Traders watch out for the IVERY PMI, expected to rebound towards 47 from 41.4, which would be a decent excuse to trigger fresh CAD gains vs GBP and NZD.