[B]Market Review[/B] - 10/01/2014 [I]21:06GMT [/I]
[B]Dollar tumbles broadly after disappointing U.S. jobs report[/B]
Dollar weakened broadly on Friday after data showed that the U.S. economy added far less jobs than expected last month, although tapering of the Federal Reserve’s stimulus program still lent some support.
Versus the Japanese yen, although dollar continued to edge higher from Thursday’s New York low at 104.57 in Asia and Europe and then rose briefly to 105.40 ahead of the release of U.S. non-farm payroll data in New York morning, price tumbled sharply to 104.19 as data came in surprisingly weaker-than-expected and price later fell further below Monday’s low at 103.91 to 103.83 before recovering due to short-covering ahead of the weekend.
U.S. official data showed that the U.S. non-farm payroll added 74,000 jobs in December, compared to expectations for a 196,000 increase, after an upwardly revised 241,000 rise the previous month. A separate report showed that the U.S. unemployment rate fell to 6.7% in December, from 7.0% in November.
The single currency rebounded to 1.3620 ahead of European opening on Friday but came in under pressure on active selling on eur/jpy cross, price fell to 1.3565 in New York morning and then rallied to 1.3687 on dollar’s broad-based weakness after the disappointing U.S. jobs report before easing.
Cable traded in a relatively narrow range of 1.6472-1.6483 in Asia and then tumbled to 1.6403 in European morning as data showed that U.K. manufacturing production was flat in November, disappointing expectations for a 0.3% rise, after a downwardly revised 0.2% uptick the previous month. The pair later dropped further to 1.6381 in New York morning before rallying to 1.6518 on dollar’s broad-based weakness on weak U.S. non-farm payroll data.
On the data front, official data showed that industrial production in France climbed 1.3% in November, exceeding expectations for a 0.4% rise, after a downwardly revised 0.5% decline the previous month
In the other news, Fed’s Lacker said ‘latest employment report showed dramatic fall in jobless rate, made substantial progress on unemployment; market expectations that interest rates will remain low may be bigger driver of market liquidity, equity prices than bond buys; healthcare act could have substantial economic impact, small business looking for how best to handle; Fed will be watching healthcare closely in next few years; wise not to cover-react to one month’s employment report as a general principle; takes a couple of quarters to show a sustainable change in economic trends; would expect FOMC to discuss a similar reduction in bond buying pace at next meeting as the $10 billion agreed in Dec; markets have a good appreciation of FOMC’s intentions, changes in forward curve more reflective of growth expectations.’
[B]Data to be released next week :[/B]
Australia Home loans, Italy industrial production, U.K Lloyds employment confidence [B]on Monday.[/B]
Japan current account balance, Economic watch DI, France current account, CPI, HICP, Italy CPI, HICP, U.K. PPI, CPI, RPI, ONS house price, EU industrial production, U.S. retail sales, import price index, export price index, Redbook retail sales, business inventories [B]on Tuesday.[/B]
Japan machine tools orders, Germany GDP, Swiss retail sales, EU trade balance, US empire state mfg, PPI, Fed releases Beige Book report, Canada existing home sales [B]on Wednesday.[/B]
Japan Tertiary industry index, machinery orders, domestic CGPI, Australia employment change, unemployment rate, U.K. RICS house prices, Germany CPI, HICP, Italy trade balance, EU CPI, U.S. CPI, Jobless claims, Net LT TIC flows, Philadelphia Fed survey, NAHB housing mrkt index [B]on Thursday.[/B]
Japan consumer confidence, U.K. retail sales, U.S. housing starts, building permits, industrial production, capacity utilization, University of Michigan consumer confidence [B]on Friday.[/B]