Intraday Market Thoughts

Archived IMT (2011.02.04)

by Ashraf Laidi
Feb 4, 2011 12:45

CANADA JOBS KNOW NO GRAVITY as Jan employment rose by 69K from 22K breaking through expectations of +15K. That is the 4th HIGHEST number over the last 5 years. The unemployment rate rose to 7.8% from 7.6% (highest since Oct 2010). Just to give an idea about the strength; a 69K increase is a near equivalent to about 600K increase in the US. BEHIND THESE NUMBERS, the +69K jump in Canada jobs, FULL TIME jobs slowed to +31K from +44K & PART TIME soared to +38K from -14K.The question then becomes AGAINST WHICH currency will traders want to buy the loonie? EURCAD and GBPCAD are possibilities for the shorts. Going long CADJPY could be considered due to the rally in bond yields (usually yen-negative) and could be especially boosted if the US jobs figures are strong enough to boost risk appetite and equity indices. So watch equity futures and US 10 yr yields and whether it sustains the jump above 3.55%. But as we have learned, we cannot ignore the Egypt Factor, with Friday being a likely occasion for surging protests as the pro-Mubarak supporters growing in numbers. One clear dynamic is the downside in EURUSD and GBPUSD, eyeing $1.3520 (100-day MA) and $1.60 after the double too from November. US Unemp rate seen at 9.5% from 9.4% while payrolls seen at +155K from 113K. Will the slowdown in ADP to 187K from 247K predict a weak NFP between 90 and 110K? More importantly, will it prevent S&P500 from closing above 1307?


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