The EURUSD traded to 1.4780 and has since settled down to 1.4725. The ADP report of private payrolls announced 40,000 jobs created in December, following a revised increase of 179,000 in November. The fourth quarter Bank of England credit conditions survey was released yesterday showing an expected downgrade in the credit market. Today, we await Non-Farm Payrolls for December.
News and Events:
With crude oil futures prices re-testing $100/bbl, the US dollar remained under pressure to the downside. The EURUSD traded to 1.4780 and has since settled down to 1.4725. The ADP report of private payrolls announced 40,000 jobs created in December, following a revised increase of 179,000 in November. This may point to a cooling labor market and a sign against contraction has the economy is creating new jobs. Jobless claims came in at 336,000, better than expected, down from 357,000 the week before. Today, we await Non-Farm Payrolls for December and the consensus is a 70,000 gain, however some major banks forecast a below than expected number of 50,000.
The fourth quarter Bank of England credit conditions survey was released yesterday showing an expected downgrade in the credit market. The report showed lower lending to households and a spike in the secured and corporate lending spreads. For this reason, investors forecast a 100bp easing in British interest rates in 2008.
Today’s Key Issues (time in GMT):
09:00 EUR Euro-Zone PMI Services (DEC F) 53.2 vs 53.2
09:00 EUR Euro-Zone PMI Composite (DEC F) 53.3 vs 53.3
09:30 GBP M4 Money Supply (MoM) (NOV F)
09:30 GBP M4 Money Supply (YoY) (NOV F)
09:30 GBP M4 Sterling Lending (BP) (NOV F)
09:30 GBP Net Consumer Credit (NOV) 1.2B vs 1.4B
09:30 GBP Net Lending Sec. on Dwellings (NOV) 7.0B vs 7.3B
09:30 GBP Mortgage Approvals (NOV) 83K vs 88K
09:30 GBP PMI Services (DEC) 51.6 vs 51.9
09:30 GBP Official Reserves (Changes) (DEC)
10:00 EUR Euro-Zone CPI Estimate (YoY) (DEC) 3.1% vs 3.1%
10:00 EUR Italy CPI (NIC incl. tobacco) (YoY) (DEC P) 2.5% vs 2.4%
10:00 EUR CPI - EU Harmonized (MoM) (DEC P) 0.2% vs 0.4%
10:00 EUR CPI - EU Harmonized (YoY) (DEC P) 2.7% vs 2.6%
10:00 USD EUR Italy CPI (NIC incl. Tobacco) (MoM) (DEC P) 0.2% vs 0.4%
13:30 USD Change in Nonfarm Payrolls (DEC) 70K vs 94K
13:30 USD Unemployment Rate (DEC) 4.8% vs 4.7%
13:30 USD Change in Manufacturing Payrolls -15K vs -11K
13:30 USD Average Hourly Earnings (MoM) (DEC) 0.3% vs 0.5%
13:30 USD Average Hourly Earningws (YoY) (DEC) 3.6% vs 3.8%
13:30 CAD Average Weekly Hours (DEC) 33.8 vs 33.8
13:30 CAD Industrial Product Price (MoM) (NOV) 0.3% vs -1.1%
13:30 USD Raw Materials Price Index (MoM) (NOV) 0.9% vs 0.3%
15:00 CAD ISM Non-Manufacturing (DEC) 53.6 vs 54.1
15:00 USD Ivey Purchasing Managers Index (DEC) 52.0 vs 58.7
16:15 USD Fed’s Kohn Speaks to Economists in New Orleans
20:30 Fed’s Madigan Speaks to Economists in New Orleans
The Risk Today:
EurUsd eyeing 1.4900 and 1.5000 as next targets, provided the pair surpasses 1.4785. Support at 1.4570 holds the door to expose 1.4300.
GbpUsd 1.9700 holds as the key support, anything below is very bearish. Longs will only lock in at 2.0100 or higher.
UsdJpy heading towards our target of 107.25, the low of November 26, 2007. As the pair trades below 109.76, the target is well in sight.
UsdChf has hit support at 1.1160. The pair eyes a move down to a downward target of 1.0950 and a possible spike to 1.0889. The pair holds very heavy under 1.1372
Resistance and Support:
By James Brandt - ACM Advanced Currency Markets, Geneva, Switzerland