Intraday Market Thoughts

Yen Slumps Through Month-End, China PMI Next

by Adam Button
Jan 31, 2013 23:07

January was an unmitigated success for Abe as his election pledge to beat deflation with a weak yen began to bear fruit. The yen was the laggard on Thursday and fell more than 5% on the month. The upcoming session features Japanese employment data and the official China PMI.Wednesday's long EURUSD Premium trade hit its 1.3580 target, while Thursday's EURUSD trade remains in progress. Gold and cable was stopped out. We also added trades on and US CRUDE OIL and SILVER. USDJPY trades are in progress

USD/JPY broke above 91.70 and yen crosses hit fresh cycle highs despite calls for month-end retracements. The 8% monthly rise in EUR/JPY was among the biggest gains since the currency's inception.

Economic news continues to show signs of improvement in the global economy. The Chicago PMI jumped to 55.6 compared to 50.5 expected. The US personal income report showed a 2.6% jump in December but it was likely boosted by one-time items. Spending rose 0.3%.

Initial jobless claims were a slight negative at 368K compared to 350K expected but the soft number comes after two weeks of unusually strong readings.

The Canadian dollar was particularly strong in US trading as USD/CAD broke below parity and the 200-day moving average to 0.9957.

Although the non-farm payrolls report is a risk on Friday, trading could be robust with Japanese unemployment for December at 2330 GMT. The main highlight will be the official China PMI at 0145 GMT. The consensus call is for a slight improvement to 50.9 from 50.6.

Act Exp Prev GMT
Chicago PMI
55.6 50.5 50.0 Jan 31 14:45
Markit Manufacturing PMI (JAN)
54 Feb 01 13:58
ISM Manufacturing PMI (JAN)
50.6 50.7 Feb 01 15:00
50.9 50.6 Feb 01 1:00
52.1 51.5 Feb 01 1:45
Personal Income (DEC)
2.6% 0.7% 1.0% Jan 31 13:30
Nonfarm Payrolls (JAN)
160K 155K Feb 01 13:30
Challenger Job Cuts (JAN) (y/y)
40.4 32.6K Jan 31 12:30
Continuing Jobless Claims
3.197M 3.176M 3.175M Jan 31 13:30
Initial Jobless Claims (JAN 26)
368K 350K 330K Jan 31 13:30

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