Global Markets:

  • Australia ANZ Job Advertisements (m/m): 1.4%, Previous: 5.1%
  • Australia AIG Construction Index: 46.2, Previous: 44.2
  • Asian markets are trading lower as of 05:00 GMT
  • The Nikkei dropped 1.40 % while Hong Kong’s Hang Seng lost 0.70 % on the day
  • Gold is trading at $1303 (-0.05 %), Silver at $19.90 (-0.20 %)
  • Crude Oil futures are down 0.30 % at $100.85
  • US 10 year yield stands at 2.719

FX Flows/Orders:

  • The overnight session was very quiet with light flows
  • Dealers note 102.90 bids from speculators and 103.50-75 supply from Japanese exporters in USD/JPY
  • EUR/USD bids building around 1.3670 and towards 1.3650
  • USD/CAD offers towards 1.10; stops building above 1.1020
  • AUD/USD has good intraday support at 0.9240-50; large stops resting sub-0.92
  • To the topside, offers lined up between 0.93 and 0.9320

 Market Sentiment:

Non-Farm Payrolls came in slightly below the forecast of 200k, at 192k. USD was trading with an offered tone after the release and the USD/JPY plunged to 103.20 after taking out stops above 104.00 first. The S&P 500 index rose initially, almost reaching the 1900 level, but dropped sharply and posted a key reversal day. The decline in US stock markets was inspired by the steady selling of NASDAQ stocks; the index closed almost 3 % lower on the day.

 EUR/USD was relative quiet post-NFP as the market probably needs more time to digest the ECB meeting. There was a rumor, reported by the German paper FAZ, that the ECB has modeled a €1 trillion heavy QE programme, but this was denied shortly after by ECB member Constancio.

 USD/CAD erased the 1.10 barrier option and was driven to a low of 1.0956, led by real money funds supply. Canadian employment figures were stronger than forecast, but the pair bounced slightly after the Ivey PMI release missed expectations. Dealers also reported good buying in AUD/USD and NZD/USD post-NFP, mostly from leveraged names.

 Looking ahead, the main event for the US Dollar will be the FOMC minutes on Wednesday. Weather effects are dropping out and should the economic data continue to show improvements, the pressure on the FOMC to taper will increase. This week’s econ calendar is relatively light and we don’t have any tier-1 releases out of the Euro Zone. Focus will likely be on German CPI data on Friday. It is slightly more busy for the Sterling, with Manufacturing & Industrial Production data on Tuesday, Trade Balances figures on Wednesday and the Bank of England meeting on Thursday. However, the market is expecting no change in policy and no accompanying statement, which should make the BOE meeting a non event.

Upcoming Events:

  • 07:00 GMT – German Industrial Production (0.3 % MoM)
  • 08:15 GMT – Swiss CPI (0.2 % MoM, -0.1 % YoY)
  • 09:30 GMT – Euro Zone Sentix Investor Confidence (14.2)
  • 16:45 GMT – FOMC Member Bullard speaks