The Morning Briefing is prepared daily at the start of the European Trading session by RTFX’s trading desk. It presents a roundup of the major news headlines occurring within the global economy that may affect the forex market. This news bulletin also includes a view of our forex calendar for the day, highs and lows achieved in the previous sessions from the forex market, global indices and commodities and brief commentary about the economic headlines.
Morning Briefing for Monday, 09 Apr 2012 (Updated 09:16:40 CET)Weak US Job report on Friday the USD lower. JPY strong overnight
Forex: Yen extends its gains, up to 1-month high with US dollar following US jobs data
Global Markets: Asian shares hurt by slower than expected US jobs report
Japan: Current account returns to surplus
United States: Jobs report shows NFP at lowest in 5 months; 121k versus 221k
Forex rates in Asia and Indices:
EUR/USD: 1.3033 – 1.3105
USD/CHF: 0.9167 – 0.9217
GBP/USD: 1.5836 – 1.5894
USD/JPY: 81.19 – 81.59
EUR/CHF: 1.2009 – 1.2019
EUR/JPY: 106.17 – 106.87
Dow Jones: 13’060.14 CLOSED
NASDAQ: 3'080.50 CLOSED
S & P 500: 1'398.08 CLOSED
Nikkei: 9’546.26 -1.47%
Shanghai: 2'290.72 -0.69%
Gold: $ 1’643.35
Crude Oil: $ 102.12
Market activity was very high last week as key US events gave way for new direction and reduced the probability of further quantitative easing from the Fed. The US job report on Good Friday, however kept the door open for further stimulus and backs up the view from the Fed that policy still has to be accommodative for the economy. The March nonfarm payrolls data missed expectations by 85k, coming out at 120k and the unemployment rate came out at 8.2% vs. 8.3% expected. EUR/USD came back slightly on Friday after four days of straight out selling, finishing the week down almost 2.0%.
Overnight, the JPY was on the bid as the current account beat market expectations at 1.18 trillion JPY vs. 1.12 trillion expected. USD/JPY is closing in on the 81-figure after touching as high as 84.19 in early March. The pair still has some distance to the Ichimoku-cloud, currently at 80.75. EUR/JPY coming close to key support at 105.66, but first the pair has to breach the Ichimoku-cloud, currently at 106.09. AUD/JPY is also continues on the offer and the Head and Shoulders formation that was confirmed last Monday at the close below the neckline paves the way for a potential technical target at 81.71.
The Swiss Franc also received some attention after the 1.20 floor in EUR/CHF was breached briefly on Thursday and the pair hasn’t been able to recover significantly despite the SNB’s efforts. The market is testing the statement by the SNB to support the exchange rate with “unlimited quantities” and punishing the Euro zone for not being able to get back on track. It is crucial for the SNB to be successful in getting the CHF to depreciate against the EUR as the Euro zone is the biggest taker of Swiss exports. Last week, sentiment indicators in the Euro zone kept in contraction as the PMI Composite on Wednesday remained below 50.
Today should be pretty quiet as some markets still are closed and the calendar is lacking interesting data. Bernanke to speak tonight in Atlanta could trigger some moves though. If EUR/USD takes out 1.2975, this should give occasion for further unwinding in the markets, opening up for a test of the 1.29-figure. Upside is protected by the 100-day moving average, currently at 1.3147, where a break would give scope for a test of the 50-day moving average at 1.3216.
Have a nice day
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