Welcome!

News Feed Item

FXPRIMUS Market Brief of the Week: Market Ignored Subdued U.S. Payroll Report

SINGAPORE, SINGAPORE -- (Marketwired) -- 02/11/14 -- In FXPRIMUS' Market Brief of The Week for 10 February, the brokerage firm's Senior Economist, Jimmy Zhu, looks at reactions to the U.S. Nonfarm Payrolls (NFP) Report.

Economic Insights

NFP Expanded Less Than Expected, While Unemployment Fell

The 5% decline in U.S. equities since 15 January reflected many "risk on" positions being either closed or scaled back on concerns about emerging markets economy and softer U.S. growth. Further downside economic surprises in near future may result in a continued reallocation of portfolios away from equities to the safer bonds and Yen. But Asian market sentiment looks quite solid today despite subdued payroll figures in the U.S., with Morgan Stanley Capital International (MSCI) Asia ex-Japan Index rebounded 0.8%, and Shanghai Composite Index rallied close to 2%.

The NFP rose less than expected last month, jobless rate unexpectedly dropped to the lowest level in more than five years, moving closer to the Federal Reserve's (Fed) key threshold at 6.5%. The figures here makes Janet Yellen's job tougher where monetary policy is concerned. The 113,000 NFP gains were much lower than the earlier estimate of 180,000. Unemployment declined to 6.6%, which was the lowest level since October of 2008. The positive news here is that labour participating rate rose to 63%, from 62.8% in the previous month. However, it is still way below the average level in 2013, indicating that the size of the labour force has been decreasing.

U.S. NFP (white), U.S. Unemployment rate (yellow), and U.S. labour participating rate (blue)

To view the figure accompanying this press release, please visit the following link:

http://media3.marketwire.com/docs/926800.jpg

There are two focuses this week which may attract investors,


1.  One of the top focuses this week may be the new Fed's chair, Janet
    Yellen's two speeches (formal presentations). She will offer her first
    semi-annual report on monetary policy before the House on 11 February,
    then before the Senate on 13 February. In our point of view, she will
    continue to stick with the Fed's 2014 earlier forecast, although
    concerns about the economy and volatilities in global financial markets
    provide a more difficult environment for the Fed. For this week, Yellen
    can wait as there is no Federal Open Market Committee (FOMC) meeting
    this month. The next FOMC meeting will be in March. She can consider all
    these political and monetary policy issues then. She would not need the
    answer for her semi-annual testimony before the House and the Senate due
    to the fact that she does not have to lead an actionable policy move
    until 19 March. All in all, investors may not hear anything regarding
    the key Fed's policy from the two presentations.
2.  The other top focus will be that members in the Euro Zone will release
    its 4Q GDP, including the aggregated ones. We estimate that the
    aggregated Euro Zone's GDP will be printed around 0.2-0.3% from the
    previous 0.1%. We think that it is one of the main reasons that the
    European Central Bank (ECB) put everything on hold last week. As long as
    the final figure on Friday confirms that, it echoes with the ECB's
    vision of a gradual recovery. Another key thing to watch is that whether
    most of the major countries are showing positive quarterly growth, and
    this is needed in the Euro Zone.

According to the ECB's meeting last week, it eliminated chances of a rate cut in March as well. First estimation of February's inflation data will be released on 28 February. So far the figures are not clear as there are no hints from the ECB. But any outcome that is weaker than expected could add pressure for the central bank to act, because currently there is no sign that the ECB is going to change the inflation projection of 1.1% this year.

The market still expects the ECB to act in the coming few months. Sovereign yields in the Euro area's peripheral nations are falling as investors perceive their economy is recovering from the debt crisis. Yesterday, government bond yields in Italy, Spain and Portugal fell to the lowest level since 2010. Portugal's 10-year yield dropped to 4.97% from 17.4% in January of 2012. The Euro strengthened last week against the Dollar after the ECB meeting. The ECB may not like to see this as it deteriorates inflation, which may prompt Mario Draghi to step in to act again.

In Asia, Aussie still has difficulties to penetrate above 0.90% against the Greenback. Chinese monetary policy risk plays a large role here. The People's Bank of China (PBOC) said that the money markets should tolerate rate changes, potentially stoking volatility and financial system risk few days ago. The 7-day interbank repo rate has already fluctuated more than 1,000 BPS in 2013, while the 14-day rate has swung by 740 BPS. Volatility may hurt borrowers and small-to-medium banks. It helped fuel cash crunches in June and December last year, along with the falling liquidity.


Top News This Week
Euro Zone 4Q Gross Domestic Product (GDP) QoQ
I expect figures to come in at 0.3%
U.S. Retail Sales MoM
I expect figures to come in at -0.1%

Trade Recommendation
AUDUSD - Short at 0.8990

U.S. Dow Index has climbed almost 3% in last Friday's close since the Monday low, even after we see the tepid NFP report. It looks like that the market seems to believe that the slower jobs added was mainly due to bad weather in the U.S. Given the fact that the coming FOMC meeting will be in March and Yellen is unlikely to change the U.S. economic forecast lower this week before the Congress and the Senate, little fresh triggers could push the volatilities higher substantially.

Should confidence improve in the largest economy, the USD's downside could be limited. Among the major pair, AUDUSD is moving toward its resistance level around 0.90.

We would like to short this pair if its price rebounds to 0.8990.


Entry Price - 0.8990
Stop Loss - 0.9050
1st Target Price - 0.8940
2nd Target price - 0.8900

To view the figure accompanying this press release, please visit the following link:

http://media3.marketwire.com/docs/926800B.jpg

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
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
Big Data, cloud, analytics, contextual information, wearable tech, sensors, mobility, and WebRTC: together, these advances have created a perfect storm of technologies that are disrupting and transforming classic communications models and ecosystems. In his session at @ThingsExpo, Erik Perotti, Senior Manager of New Ventures on Plantronics’ Innovation team, provided an overview of this technological shift, including associated business and consumer communications impacts, and opportunities it m...
With billions of sensors deployed worldwide, the amount of machine-generated data will soon exceed what our networks can handle. But consumers and businesses will expect seamless experiences and real-time responsiveness. What does this mean for IoT devices and the infrastructure that supports them? More of the data will need to be handled at - or closer to - the devices themselves.
When you focus on a journey from up-close, you look at your own technical and cultural history and how you changed it for the benefit of the customer. This was our starting point: too many integration issues, 13 SWP days and very long cycles. It was evident that in this fast-paced industry we could no longer afford this reality. We needed something that would take us beyond reducing the development lifecycles, CI and Agile methodologies. We made a fundamental difference, even changed our culture...
Updating DevOps to the latest production data slows down your development cycle. Probably it is due to slow, inefficient conventional storage and associated copy data management practices. In his session at @DevOpsSummit at 20th Cloud Expo, Dhiraj Sehgal, in Product and Solution at Tintri, will talk about DevOps and cloud-focused storage to update hundreds of child VMs (different flavors) with updates from a master VM in minutes, saving hours or even days in each development cycle. He will also...
Things are changing so quickly in IoT that it would take a wizard to predict which ecosystem will gain the most traction. In order for IoT to reach its potential, smart devices must be able to work together. Today, there are a slew of interoperability standards being promoted by big names to make this happen: HomeKit, Brillo and Alljoyn. In his session at @ThingsExpo, Adam Justice, vice president and general manager of Grid Connect, will review what happens when smart devices don’t work togethe...
SYS-CON Events announced today that Dataloop.IO, an innovator in cloud IT-monitoring whose products help organizations save time and money, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Dataloop.IO is an emerging software company on the cutting edge of major IT-infrastructure trends including cloud computing and microservices. The company, founded in the UK but now based in San Fran...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
Some people worry that OpenStack is more flash then substance; however, for many customers this could not be farther from the truth. No other technology equalizes the playing field between vendors while giving your internal teams better access than ever to infrastructure when they need it. In his session at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will talk through some real-world OpenStack deployments and look into the ways this can benefit customers of all sizes....
SYS-CON Events announced today that Addteq will exhibit at SYS-CON's @DevOpsSummit at Cloud Expo New York, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Addteq is one of the top 10 Platinum Atlassian Experts who specialize in DevOps, custom and continuous integration, automation, plugin development, and consulting for midsize and global firms. Addteq firmly believes that automation is essential for successful software releases. Addteq centers its products an...
In his session at @ThingsExpo, Sudarshan Krishnamurthi, a Senior Manager, Business Strategy, at Cisco Systems, will discuss how IT and operational technology (OT) work together, as opposed to being in separate siloes as once was traditional. Attendees will learn how to fully leverage the power of IoT in their organization by bringing the two sides together and bridging the communication gap. He will also look at what good leadership must entail in order to accomplish this, and how IT managers ca...
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain.
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...