Archived IMT (2011.03.04)

Although the US Jobs report showed the rare occurrence of NFP at the higher end of expectations (192K & Jan NFP revised to +63K from +36K) and unemployment rate lower than expected (8.9% from 9.0%), markets are not taking the news too well. I argued in the last IMT that markets may have been expecting a strong report considering the normalisation from inclement weather conditions. Another aspect worth looking at is that Average Hourly Earnings slipped back to 0.9% from 0.4%, therefore putting back any inflationary argument back to rest. Despite Gold regaining $1430s and oil prices on the rise again, USDX holds right above the 3-yr trendline support of 76.20-30s. The bulk of USDX weakness is driven by EURUSD hovering near $1.40s. GBPUSD remains unable to regain $1.63, while AUDUSD (not included in USD Index) goes from bad to worse, struggling to stay atop the 1.01 figure its high profile failure to break above 1.02. I reiterate that AUDUSD shorts must be protected above 1.02, while looking for incremental targets at 1.0120, 1.0060 and 0.9980. Canadas Feb PMI exploded to 69.3 from 41.4. I cannot emphasize enough my bearishness on NZDCAD (as was done in past 2 days), down -180 pips as the fundamentals deteriorate for NZD and continue to brighten for Canada. NZDUSD IS NOW BELOW its 200-day MA of 0.7360, testing the Dec 2010 double bottom.