vendredi 3 avril 2015
Not So 'Good' Friday: FX Market Post-NFP - SocGen
Posted on 14:51 by nice news
The March US payroll report came in a long way below expectations, notes SocGen.
"Payrolls increased by 126k, vs. expectations of 245k. Back-month revisions reduced employment by 69k. The Household survey posted an even lower 34k increase. The unemployment rate stayed at 5.5%," SocGen clarifies.
On a more positive note, SocGen notes that wage growth is edging up, while overall employment growth at 2.3%, still well above long-term trends and indeed, Q1 was 2.2% higher than Q4 on an annualised basis.
"SG economists are not going to rule out a June rate hike on today’s figures," SocGen adds.
FX Implications: Here are some thoughts from SocGen:
1- The key psychological level is still held at 1.1070 and we’d look for a further spike higher if that does break, given the positioning and thin market today. But for now, it holds.
2- Other currencies which may struggle to really capitalise on dollar softness include CAD (too close to the US and too likely to import the same weakness when their job data are released) and AUD (chances of a rate cut this week haven’t decreased, and US slowdown won’t do anything for commodity prices).
3- Short CAD/JPY and AUD/JPY both appeal, though CAD/JPY needs USD/CAD to hold above 1.24 for confidence not to be damaged.
"Payrolls increased by 126k, vs. expectations of 245k. Back-month revisions reduced employment by 69k. The Household survey posted an even lower 34k increase. The unemployment rate stayed at 5.5%," SocGen clarifies.
On a more positive note, SocGen notes that wage growth is edging up, while overall employment growth at 2.3%, still well above long-term trends and indeed, Q1 was 2.2% higher than Q4 on an annualised basis.
"SG economists are not going to rule out a June rate hike on today’s figures," SocGen adds.
FX Implications: Here are some thoughts from SocGen:
1- The key psychological level is still held at 1.1070 and we’d look for a further spike higher if that does break, given the positioning and thin market today. But for now, it holds.
2- Other currencies which may struggle to really capitalise on dollar softness include CAD (too close to the US and too likely to import the same weakness when their job data are released) and AUD (chances of a rate cut this week haven’t decreased, and US slowdown won’t do anything for commodity prices).
3- Short CAD/JPY and AUD/JPY both appeal, though CAD/JPY needs USD/CAD to hold above 1.24 for confidence not to be damaged.
Not So 'Good' Friday: FX Market Post-NFP - SocGen
Categories: Not So Good Friday: FX Market Post-NFP - SocGen
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