[B]Market Review[/B] - 03/08/2013 [I]02:26GMT[/I]
[B]Dollar falls broadly after payrolls miss estimate[/B]
The greenback tumbled against its major peers on Friday as the weak U.S. non-farm payrolls data showed tepid job growth dampened speculation that the Federal Reserve will reduce its size of asset purchases anytime soon.
Versus the Japanese yen, the greenback ratcheted higher from Asian low at 99.28 on continued rise in Japan’s equities and climbed to intra-day high of 99.95 at New York open on active cross-selling of yen. However, the pair nose-dived to 98.91 after the release of weaker-than-expected U.S. non-farm payroll data and later hit session low at 98.66 after release of weak U.S. factory orders before staging a recovery in U.S. afternoon.
U.S. non-farm payrolls in July came in at 162K, lower than market expectation of 184K. However, unemployment rate in July decreased to 7.4%, better than street forecast of 7.5%. U.S. factory orders in June was 1.5%, worse than the forecast of 2.3%.
Despite euro’s initial marginal weakness to 1.3190 in Asian morning, price staged a recovery to 1.3227 in Europe on short-covering before falling again to 1.3187 in New York morning. However, the pair rallied to 1.3285 after the release of the weak U.S. non-farm payroll and later reached session high of 1.3294 and then traded narrowly in U.S. afternoon.
Although the British pound dropped marginally below Thursday’s low at 1.5110 to 1.5102 in Asian morning, the pair rebounded to 1.5179 in European morning after the release of stronger-than-expected U.K. construction PMI (57.0 versus the forecast of 51.5), price later pierced through Wednesday’s top at 1.5254 to 1.5278 in New York morning on dollar’s broad-based weakness and later climbed to 1.5310 before moving narrowly in U.S. afternoon.
On the data front, eurozone PPI in Jun came in at 0.0% m/m and 0.3% y/y, same as expectation. U.K. nationwide house prices in June came in at 0.8% m/m and 3.9% y/y, better than the forecast of 0.4% and 3.9%.
In other news, Fed’s Bullard said ‘hard to read too much into slight change in Fed’s description of growth; still need to see pick up in growth, arithmetic getting harder and harder; Fed needs to see more data from H2 2013 b4 taking a decision on bond tapering; decision to taper asset purchases does not change nature of Fed commitment to hold rates near zero; some key measures of the U.S. labour market have improved since Sept but other measures have not; Fed would not normally remove policy accommodation when inflation is below target n projected to stay there.’
[B]Data to be released next week : [/B]
Australia retail sales, China HSBC service PMI, Italy Service PMI, France Service PMI, Germany Service PMI, U.K. Service PMI, EU Service PMI, investor confidence, retail sales, U.S. ISM non-manufacturing PMI on Monday. Financial markets in Australia and Canada will closed for holiday.
Australia trade balance, house price index, rate decision, Japan leading indicators, U.K. BRC retail sales, industrial production, manufacturing production, Italy industrial production, GDP, Germany factory orders, Canada trade balance, import, export, U.S. trade balance, retail sales on Tuesday.
New Zealand unemployment rate, employment change, Australia home loans, Germany industrial production, France trade balance, U.K. employment confidence, Canada building permits, PMI, on Wednesday.
Australia employment change, unemployment rate, Japan rate decision, current account, economic watch DI, China trade balance, import, export, Germany trade balance, import, export, current account, Canada new housing price index, U.S. jobless claims on Thursday.
Japan tertiary industry index, consumer confidence, China CPI, PPI, industrial production, fixed asset invest urban, retail sales, France industrial production, manufacturing production, Italy trade balance, CPI, HICP, U.K. trade balance, Canada housing starts, unemployment rate, net change in unemployment, U.S. wholesale inventories, wholesale sales on Friday.