Intraday Market Thoughts

Payrolls Miss Badly, CAD Takes the Lead in CFTC Data

by Ashraf Laidi
Sep 9, 2012 23:00

A weak non-farm payrolls reading rocked the US dollar and re-kindled talk of a QE3 announcement next week. The euro was the top performer and the buck lagged. The weekly CFTC positioning data showed a shift into CAD as it hit the highest levels of the year. More of Ashrafs take on Fridays jobs figures is found below.

Payrolls rose 96K in August, lower than the 96K expected. Details of the report were soft with average weekly hours and earnings missing expectations.

The US dollar immediately slumped and continued lower. USD/JPY dropped nearly a full cent to 78.02. EUR/USD took off and eventually closed above 1.28. The euro now eyes the 200-day moving average of 1.2841.

A survey of economists from Reuters now sees a 60% chance of QE3 next week but we continue to believe that inflation worries and the potential for unintended consequences will keep Bernanke on the sidelines.

The euro, pound, Canadian dollar and gold all hit the highest levels of the summer. CAD was boosted by a solid employment report that saw 34K jobs compared to the 10K expected.

Weekly CFTC data was relatively unmoved but showed that CAD is now the favourite of the speculative community, surpassing AUD. Expect to see larger changes next week when Fridays moves are taken into account.

EUR -102K vs -101K

JPY +24K vs +22K

GBP 7K vs +2K

AUD +62K vs +78K

CAD +67K vs +61K

NZD +11K vs +14K

CHF -13K vs -11K

Ashrafs final words on NFP & Draghi


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