Welcome!

News Feed Item

FXPRIMUS Market Brief of the Week: Is This Non-farm Payroll (NFP) the Same as a Weather Report?

SINGAPORE, SINGAPORE -- (Marketwired) -- 01/14/14 -- In FXPRIMUS' Market Brief of The Week for 13 January, the brokerage firm's Senior Economist, Jimmy Zhu, analyses labour market data from US and Australia, and China's Manufacturing Purchasing Managers' Index.

Economic Insights

Investors shouldn't overreact on one-month data, especially from DecemberIn the United States, no single indicator can tell the actual scenario in the labor market. One-month data, especially for December, is not significant enough to change the Federal Reserve (Fed) outlook on the US economy and its monetary policy. Under this prospective, payrolls data last Friday provided ample selling opportunities for currencies rebounding sharply, such as the Aussie and Yen, as long as the US recovery continues gaining its momentum later in the year.

The Labor Department report showed that employment rose by 74,000, the smallest gain since January. The falling unemployment rate with a falling participating rate shouldn't be viewed as positive since more people left the labor force. You can't eliminate the weather factor and other separated data suggests it. Heavy snowfall forced some workers to remain home; less hiring will be available under this circumstance. According to official figures, 273,000 people didn't report to work because of bad weather, the most for any December since 1977. In other words, weather had an impact; the market understood that and so does the Fed. If this was any other month, payrolls might not change so significantly. However, many temporary jobs are required in the Christmas and year-end seasons, bad weather forces more people to refuse to hire or be hired. The difficult thing to explain is why the participation rate fell 0.2%. It didn't echo with recent resilient indicators in the US, such as Institute for Supply Management (ISM) manufacturing and non-manufacturing Purchasing Managers' Indexes (PMI).

To view a photo associated with this release, please visit the following link: http://media3.marketwire.com/docs/922036a.pdf

The market may have an opportunity to digest the NFP, thanks to the minimal data flow this week. It also reflects street expectation on the Federal Open Market Committee (FOMC) decision this month. Even with unemployment falling to 6.7% at this stage, I do not think the Fed will rush to lower its threshold before normalizing rates in the upcoming few meetings. They expect to gradually remove its stimulus in its balance sheet this year, unless Fundamentals change substantially in the US or globally in the latter part of the year.

Australia will release its labor market data this week. The Reserve Bank of Australia (RBA) is expected to use it to decide the following monetary policy in February, and to what extent to use verbal intervention to its Aussie dollar, which is called "jawboning." Based on the Swap market probability, the market still expected one more rate cut from the RBA. By looking at the macro picture on the Australia economy, the currency easing cycle still exists well, especially when the Chinese economy may lose its recovery momentum in the near term.

In China, manufacturing PMI started falling from its peak despite economic indicators remaining sound. But the US and Euro Zone manufacturing activities continue seeking a new high. This alarms the possible growth divergence between the Chinese economy and Developed Markets in western countries. It also further alarms the RBA to keep its monetary policy longer than expected.

For the European Central Bank (ECB) press conference, no significant monetary policy changed besides highlighting a strengthening firmer forward guidance. Disinflation in the Euro Zone hasn't been severe enough to prompt the central bank to ease further after it cut the rate to a record low at 0.25% last November.

Top news this week

US Retail Sales MoM

I expect figures to come in at 0.1%.

Australia's Employment Changes

I expect figures to come in at 11,000.

Trade Recommendation

Short AUDNZD at 1.1055

The AUDNZD was in a clear downtrend since March last year, and there is no clear evidence to show that the pair will reverse yet. According to the latest readings of Chinese data, the further upside surprise of the Chinese economy in the near run has been well-trimmed. In other words, demands on raw materials shrank. However, rising wages in China continue boosting demand for dairy and food imports, benefiting New Zealand's economy.

I would like to go Short on the AUDNZD if the pair rebounds to 1.0880.

Entry Price = 1.0880

Stop Loss = 1.0930

1st Profit = 1.0830

2nd Profit = 1.0800

To view a graph associated with this release, please visit the following link: http://media3.marketwire.com/docs/922036b.pdf

ABOUT FXPRIMUS

FXPRIMUS offers retail traders a level of trade execution, service quality and fund safety that are normally reserved only for the largest investors. Serving traders in 205 countries across 6 continents FXPRIMUS combines an unmatched level of fund safety with regular independent audits of company financials and Straight Through Processing, top notch execution with tight spreads, prompt and responsive customer support, ISO 27001 certification in Information Security, ISO 9001:2008 certification in Quality Management and an industry-leading trader toolset that includes free access to powerful trader tools. FXPRIMUS truly is The Safest Place To Trade.

Add to Digg Bookmark with del.icio.us Add to Newsvine

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
There is growing need for data-driven applications and the need for digital platforms to build these apps. In his session at 19th Cloud Expo, Muddu Sudhakar, VP and GM of Security & IoT at Splunk, will cover different PaaS solutions and Big Data platforms that are available to build applications. In addition, AI and machine learning are creating new requirements that developers need in the building of next-gen apps. The next-generation digital platforms have some of the past platform needs a...
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
Is your aging software platform suffering from technical debt while the market changes and demands new solutions at a faster clip? It’s a bold move, but you might consider walking away from your core platform and starting fresh. ReadyTalk did exactly that. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, will discuss why and how ReadyTalk diverted from healthy revenue and over a decade of audio conferencing product development to start an innovati...
As ridesharing competitors and enhanced services increase, notable changes are occurring in the transportation model. Despite the cost-effective means and flexibility of ridesharing, both drivers and users will need to be aware of the connected environment and how it will impact the ridesharing experience. In his session at @ThingsExpo, Timothy Evavold, Executive Director Automotive at Covisint, will discuss key challenges and solutions to powering a ride sharing and/or multimodal model in the a...
WebRTC adoption has generated a wave of creative uses of communications and collaboration through websites, sales apps, customer care and business applications. As WebRTC has become more mainstream it has evolved to use cases beyond the original peer-to-peer case, which has led to a repeating requirement for interoperability with existing infrastructures. In his session at @ThingsExpo, Graham Holt, Executive Vice President of Daitan Group, will cover implementation examples that have enabled ea...
DevOps and microservices are permeating software engineering teams broadly, whether these teams are in pure software shops but happen to run a business, such Uber and Airbnb, or in companies that rely heavily on software to run more traditional business, such as financial firms or high-end manufacturers. Microservices and DevOps have created software development and therefore business speed and agility benefits, but they have also created problems; specifically, they have created software sec...
SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...
SYS-CON Events announced today that Tintri Inc., a leading producer of VM-aware storage (VAS) for virtualization and cloud environments, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Tintri VM-aware storage is the simplest for virtualized applications and cloud. Organizations including GE, Toyota, United Healthcare, NASA and 6 of the Fortune 15 have said “No to LUNs.” With Tintri they mana...
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
More and more companies are looking to microservices as an architectural pattern for breaking apart applications into more manageable pieces so that agile teams can deliver new features quicker and more effectively. What this pattern has done more than anything to date is spark organizational transformations, setting the foundation for future application development. In practice, however, there are a number of considerations to make that go beyond simply “build, ship, and run,” which changes ho...
Kubernetes is a new and revolutionary open-sourced system for managing containers across multiple hosts in a cluster. Ansible is a simple IT automation tool for just about any requirement for reproducible environments. In his session at @DevOpsSummit at 18th Cloud Expo, Patrick Galbraith, a principal engineer at HPE, discussed how to build a fully functional Kubernetes cluster on a number of virtual machines or bare-metal hosts. Also included will be a brief demonstration of running a Galera M...
According to Forrester Research, every business will become either a digital predator or digital prey by 2020. To avoid demise, organizations must rapidly create new sources of value in their end-to-end customer experiences. True digital predators also must break down information and process silos and extend digital transformation initiatives to empower employees with the digital resources needed to win, serve, and retain customers.
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lea...
IoT is fundamentally transforming the auto industry, turning the vehicle into a hub for connected services, including safety, infotainment and usage-based insurance. Auto manufacturers – and businesses across all verticals – have built an entire ecosystem around the Connected Car, creating new customer touch points and revenue streams. In his session at @ThingsExpo, Macario Namie, Head of IoT Strategy at Cisco Jasper, will share real-world examples of how IoT transforms the car from a static p...