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Home / Blogs / Americas roundup: Dollar rises on rate hopes despite lackluster U.S. payrolls data ,US stocks hit fresh highs, Gold dips, Oil retreats on U.S. output rise after hitting near 2-yr high -january 6th 2017

Americas roundup: Dollar rises on rate hopes despite lackluster U.S. payrolls data ,US stocks hit fresh highs, Gold dips, Oil retreats on U.S. output rise after hitting near 2-yr high -january 6th 2017

Americas roundup: Dollar rises on rate hopes despite lackluster U.S. payrolls data ,US stocks hit fresh highs, Gold dips, Oil retreats on U.S. output rise after hitting near 2-yr high -january 6th 2017

Market Roundup

• US Dec Non-Farm Payrolls, 148k, 190k forecast, 228k previous, 252k revised.

• US Dec Unemployment Rate, 4.1%, 4.1% forecast 4.1% previous.

• US Dec Average Earnings MM, 0.3%, 0.3% forecast, 0.2% previous, 0.1% revised.

• US Dec Average Earnings YY, 2.5%, 2.5% forecast, 2.5% previous, 2.4% revised.

• US Nov Factory Orders MM, 1.3%, 1.1% forecast, -0.1% previous, 0.4% revised.

• US Dec ISM N-Mfg PMI, 55.9, 57.6 forecast, 57.4 previous.

• US Nov International Trade MM $, -50.5 bln, -49.5 bln forecast, -48.7 bln previous, -48.9 bln. revised.

• US Nov Goods Trade Balance (R), -70.0 bln, -69.7 bln previous.

• Fed’s Harker says two rate hikes ‘appropriate’ this year.

• Fed’s Powell had little enthusiasm for QE3, transcripts show.

• Fed’s Mester says U.S. economy firm, inflation to rebound.

• Atlanta Fed lowers U.S. Q4 GDP view to 2.7 percent.

• U.S-Korea trade talks pit pickup trucks against the nuclear threat.

• OPEC oil cut adherence rises in Dec as Venezuela output slides – survey.

• Canada Nov Trade Balance C$, -2.54, -1.20 bln forecast, -1.47 previous, -1.55 revised.

• Canada Dec Employment Change, 78.6k, 1.0k forecast 79.5k previous.

• Canada Dec Unemployment Rate, 5.7%, 6.0% forecast, 5.9% previous.

Looking Ahead – Economic Data (GMT)

• 7 Jan 22:30 AU Dec AIG Construction Index, 57.5 previous

Looking Ahead – Events, Other Releases (GMT)

• 6 Jan 13:00 BoE’s Haldane: Chairing panel sessions at the Allied Social Sciences Association Annual Meeting in Philadelphia

• 6 Jan 13:00 BoE’s Haldane, ECB’s Michael Ehrmann talk on central bank communications in Washington

• 6 Jan 15:15 Fed’s Potter participates in the panel, “The Balance Sheets of Central Banks and the Shortage of Safe Assets” before the 2018 ASSA/American Economic Association Annual Meeting in Philadelphia

• 6 Jan 15:15 Fed’s Mester participates in the panel “Integrating Financial Stability with Monetary Policy” before the 2018 ASSA/American Economic Association Annual Meeting in Philadelphia

• 7 Jan 13:00 Fed’s Williams speaks on “What to Expect From the Lower Bound on Interest Rates: Evidence From Derivatives Prices” before the 2018 ASSA/American Economic Association Annual Meeting in Philadelphia

• 8 Jan 11:30 IMF chief economist Maury Obstfeld speaks in Paris

• 8 Jan 17:40 Fed’s Bostic speaks on the economic outlook and monetary policy before the Rotary Club of Atlanta in Atlanta

• 8 Jan 18:35 Fed’s Williams participates in the panel, “The Options: Keep It, Tweak It, or Replace It” before the Brookings Institution event, “Should the Fed Stick with the 2-Percent Inflation Target or Rethink It?” in Washington

Currency Summaries

EUR/USD is likely to find support at 1.2000 levels and currently trading at 1.2040 levels. The pair has made session high at 1.2081 and hit lows at 1.2018 levels. The euro declined against the U.S. dollar on Friday as investors reckoned a weaker-than-expected U.S. December non-farm payrolls report would not deter the Federal Reserve from raising interest rates multiple times this year though at a gradual pace. U.S. nonfarm payrolls increased by 148,000 jobs last month. Economists were forecasting job gains of 190,000. Employment data for October and November data were revised to show 9,000 fewer jobs created than previously reported. One bright spot in the U.S. December employment report was the rise in wage growth, analysts said. Average hourly earnings rose 9 cents, or 0.3 percent, in December after gaining 0.1 percent in the prior month. That lifted the annual increase in wages to 2.5 percent from 2.4 percent in November. The dollar briefly slipped after the softer-than-forecast number, but regained momentum. The dollar index, a measure of the greenback’s value against six major currencies, up 0.2 percent on the day. While the euro down 0.3 percent to $1.2040.

GBP/USD is supported in the range of 1.3491 levels and currently trading at 1.3566 levels. It reached session high at 1.3572 and dropped to session low at 1.3541 levels. The British firmed against the greenback on Friday ending the week little changed as traders were keen to see new developments on Brexit negotiations before taking new positions on the British currency. Economic data released over the week have pointed to the economy picking up at the end of last year, with businesses growing more optimistic about the year ahead. But that has had little impact on the currency. Numbers released on Friday showing Britain’s economic productivity rose at its fastest rate in more than six years in the three months to Sept. 30 – though in absolute terms still barely above its level of nearly a decade ago – did not give the pound any additional support. Sterling was trading flat on the day at $1.3563. It had hit a 3-1/2-month high of $1.3614 on Wednesday, less than half a cent away from its highest since the Brexit vote, but traders said it needed new catalysts to break any higher.

USD/CAD is supported at 1.2350 levels and is trading at 1.2410 levels. It has made session high at 1.2412 and lows at 1.2353 levels. The Canadian dollar rose to a three-month high against its U.S. counterpart on Friday as upbeat domestic data boosted expectations that Bank of Canada will raise interest rates soon. The Canadian economy added almost 80,000 jobs for the second month in a row in December on a surge in part-time employment, and the jobless rate dipped to a 41-year low of 5.7 percent, Statistics Canada said. Analysts had expected a modest gain of 1,000 jobs. Chances of a hike at the next rate decision on Jan. 17 rose to more than 60 percent from 35 percent before the data, the overnight index swaps market indicated. Chances of a hike at the next rate decision on Jan. 17 rose to more than 60 percent from 35 percent before the data, the overnight index swaps market indicated. In separate data, Canada’s trade deficit in November widened to C$2.54 billion as both exports and imports benefited from increased activity in the automotive industry, Statistics Canada said. The Canadian dollar was last trading at C$1.2403 to the greenback, up 0.9 percent. The currency touched its strongest since Sept. 27 at C$1.2355.

USD/JPY is supported around 112.69 levels and currently trading at 113.12 levels. It peaked to hit session high at 113.26 and made session lows at 112.98 levels. The U.S. dollar strengthened against the Japanese yen on Friday, after a brief dip, as investors decided the U.S. December non-farm payrolls report would not stop the Federal Reserve from raising interest rates multiple times this year. Nonfarm payrolls increased by 148,000 last month, the Labor Department announced Friday. The weak number was largely due to distress in the retail sector, where jobs fell by 20,300 in their largest drop since March. Accelerating monthly wage gains pointed to labor market strength that could pave the way for the Federal Reserve to increase interest rates in March. Average hourly earnings rose 9 cents, or 0.3 percent, in December after gaining 0.1 percent in the prior month. That lifted the annual increase in wages to 2.5 percent from 2.4 percent in November. December’s payrolls number is further evidence of slowing job growth as the economy approaches full employment. But the $1.5 trillion package of tax cuts signed into law by President Donald Trump last month may boost job growth.

Equities Recap

European shares powered to their best week since last April on Friday, with the British and Swiss benchmarks hitting records, propelled by optimism about a strengthening regional economy and fresh new highs on Wall Street.

UK’s benchmark FTSE 100 closed up by 0.2 percent, the pan-European FTSEurofirst 300 ended the day up by 0.80 percent, Germany’s Dax ended up by 1.1 percent, France’s CAC finished the day up by 1 percent.

The S&P 500 and Nasdaq notched their best weekly gains in more than a year on Friday as technology stocks helped lift major indexes to record highs.

Dow Jones closed up by 0.88 percent, S&P 500 ended up by 0.70 percent, Nasdaq finished the day up by 0.82 percent.

Treasuries Recap

U.S. Treasury yields rose modestly on Friday as the new tax cuts and a pickup in monthly wage gains bolstered optimism about the country’s economic health even as data showed slower-than-expected job growth in December.

The benchmark 10-year Treasury yield was up 2 basis point at 2.474 percent, within striking distance of the nine-month peak of 2.504 percent set on Dec. 21.

The two-year yield, which is sensitive to traders’ views on Fed policy, edged up 0.4 basis point to 1.960 percent. On Thursday, it reached 1.976 percent which was the highest since October 2008.

Commodities Recap

Gold dipped in choppy trading on Friday as traders cashed in gains from the metal’s rally to 3-1/2-month highs this week and as the dollar rose even after weaker-than-expected U.S. payrolls data for December.

Spot gold was down 0.2 percent at $1,319.70 an ounce by 1:45 p.m. EST (1845 GMT), off Thursday’s high of $1,325.86. It was still up 1.3 percent from last week’s close. U.S. gold futures for February delivery settled up 70 cents, or 0.05 percent, at $1,322.30 per ounce.

Oil prices fell on Friday, dropping from highs last seen in 2015, as soaring U.S. production undermined a 10 percent rally from December lows that was driven by tightening supply and political tensions in OPEC member Iran.

West Texas Intermediate crude futures fell 57 cents to settle at $61.44 a barrel. WTI hit $62.21 the previous day, which was its strongest price since May 2015.

Brent crude futures for March delivery fell 45 cents, or 0.7 percent, to $67.62 a barrel. The previous day it touched $68.27, also the highest price since May 2015.

Source: FXWire Media Round Ups

 

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