Forex new for NY trading on December 6, 2019
- US stocks close with solid gains. S&P up on the week. Dow and Nasdaq show modest declines
- UK debate. Johnson/Corbyn debate on BBC
- Saudi oil minister: Jury still out on where oil market will be in March
- CFTC commitments of traders: EUR shorts increase
- WTI crude oil futures settle the week at $59.20
- US consumer credit rises by $18.91 billion versus $16 billion estimate
- Baker Hughes total rigs 799 versus 799 estimate
- The latest Panelbase Poll: Conservatives 43% (up 1%). Labour 34% (Unchanged)
- The Atlanta Fed GDPNow 4Q estimate 2.0% vs 1.5%
- NY Fed Nowcast estimate for 4Q growth falls to 0.6% from 0.8% last week
- Bank of Canada Poloz announces he will step down in June 2020 mandate expires
- US wholesale inventories for October (F) +0.1% versus 0.2% estimate
- University of Michigan sentiment for December 99.2 versus 97.0 estimate
- Kudlow on CNBC: America is working
- Saudi Arabia to cut production by 167,000 B/D
- Russia energy minister Novak: Russia quota remains unchanged
- Canada net change in employment for November 2019 -71.2 K versus +10K estimate
- US Non-farm payroll for November 266K vs 180K estimate
- The NZD is the strongest and the CHF is the weakest ahead of the US/Canada jobs report
In other markets,
- Spot gold is down -$16.32 or -1.11% at $1459.73
- WTI crude oil is up $0.72 or +1.22% at $59.15
The markets were treated to an early holiday present (and Pres. Trump too) when the November employment report came out much stronger than expectations.
- Nonfarm payroll rose by 266K well above the 183K estimate and well above the ADP report of 67K.
- The prior month revised up by 41K.
The combination is a 305K gain all in.
Ho! Ho! Ho!
The rest of the report was not bad either with average hourly earnings year on year rising by 3.1% and the unemployment rate falling to 3.5%. (estimate 3.6%).
The cherry on top later came in the form of a sharp rise in the University of Michigan sentiment index for December. It rose to 99.2 from 96.8 last month and 97.0 estimate.
Ho! Ho! Ho!.
The data helped to push stocks higher. The final numbers showed:
- S&P index, +0.91%
- NASDAQ index, +1.0%
- Dow industrial average, +1.22%
Given the sharp declines earlier in the week, the gains today were still not strong enough to dig the Dow and Nasdaq out of the red for the week (they fell by -0.13% and -0.1% respectively) but the S&P did close the week with a small gain of +0.16%. Sometimes a small loss is still a great result.
Not all was great in the jobs market around North America. As good as the US report was, the Canadian report was the exact opposite. In fact, it was more of a Bah Humbug report (-71K in net job change and the unemployment rate spiked to 5.9% from 5.5%).
The combination sent the loonine tumbling lower. It was the weakest of the major currencies in trading today (see the ranking below).
As a result of the contrasting jobs numbers, the USDCAD rose by 0.59% on the day. That move saw the pr him himice move from a pre-report low of 1.3153 to a high of 1.3269 where the price ran into the 200 hour MA (the MA was at 1.3265 at the time). The afternoon trading slowed the trend down and the pair is closing at 1.3250 area. In the new week. if the price is to continue higher, gettting back above the 200 hour MA and then the 200 day MA at 1.32778 will be the next key hurdles.
The EURUSD was another big mover vs the USD today. It fell from a pre-release high near 1.1100, through its 100 day MA at 1.10647 and 200 hour MA at 1.10477. The low stalled at 1.1039 and retraced back above the 200 hour MA at 1.10477 - closing at 1.1055. In the new week, the 100 day MA above at 1.10647 is topside resistance and the 200 hour MA at 1.10477 is support. A break outside of either of those extremes will help dictate the next directional move.
A bit of a surprise was the price action in the USDJPY today. At first the USDJPY moved sharply higher on the report with the price spiking from around 108.50 to 108.918. That took the price back above the 200 day MA at 108.826. Howver, the momentum could not be sustained despite the higher stocks and modestly higher yields ( 2 year up 2.2 bps and 10 year up 2.6 bps today). When the price started to trade back below the 200 day MA, buyers turned to sellers and the price ending up retracing all the way back to the 108.50 start point. That puts the shorts more in control in the USDJPY to end the week (with risk at the falling 100 hour MA at 108.767 and the 200 day MA at 108.826).
The USDCHF moved higher and is closing above its 100 day MA and 100 hour MA at the 0.9886 area.
So Ho! Ho! Ho! for the US and Bah Humbug! for the Canadians today.
Wishing you all a happy and safe weekend.
