|
ASwiss
International Financial Brokerage Co.
U.S.
Unemployment Reaches 26-Year High of 9.8%
The U.S. economy lost more jobs than anticipated in
September sending the unemployment rate to a 26-year
high of 9.8%. Employers let go 263,000 workers, which
was an increase from 201,000 in August and surpassed
economists estimates for 175,000. The service sector led
the decline by more than doubling last month’s total of
69,000 with a loss of 147,000. The sector which accounts
for over 70% of U.S. GDP continues to feel the impact of
the worst recession since WWII. An unexpected drop in
government jobs by 53,000 may be evidence that the
impact from the fiscal stimulus plan is dissipating.
State and local agencies saw the biggest losses as they
have been surviving on the help from Washington D.C.
with tax receipts disappearing. Fed Chairman Ben
Bernanke stated Thursday in his testimony before the
House financial services committee that the current
expansion may not be enough to “substantially” lower
unemployment. We initially saw dollar strength following
the dour report on safe haven flows. However, the
greenback has given back those gains as fundamental
influences are growing in importance. Fears of another
global collapse have dwindled and traders may look
outside the U.S. for better investment opportunities
which could lead to more dollar weakness.
The disappointing NFP payroll report sparked a bout of
volatility across all markets making it difficult to
execute scalping strategies. The GBPUSD reaction was
relatively subdued and with a solid support level below
and declining daily variation it may offer the best
opportunity in the current market environment.
The 38.2% Fibo extension of the 1.3657- 1.7052 rally is
a solid support line which may limit downside risks. The
level may also present a exit and entry level for
traders to target. The GBP/USD isn’t an ideal scalping
pair as it has been volatile, but recent price action
has held for the most part in the 1.5760-1.600 range.
The pair was also relatively quiet following the U.S.
NFP report which may lead to an ideal period of low
volatility that high frequency traders can exploit.
Although crude oil added +0.3% to settle at 70.82 Thursday,
trading momentum was weakened as the US reported a
series of disappointing data. Investors worried that
economic recovery might not come as expected and thus
drove capital away from risky assets.
US initial jobless claims increased to 551K in the week ended
September 26 from 534K in the prior week. The market had
anticipated a much more modest rise to 535K. After
making a peak in March, initial jobless claims have
dropped -18% in 26 weeks. However, the decline was
rather gradual compared with previous recessions in
1970s and 1980s. The sluggishness in the falls in claims
signals recovery in the job market is slow.
ISM manufacturing index slid to 52.6 in September from 52.9 in
the previous month. The market forecast an improvement
to 54. Although the index suggested manufacturing
activities remained in expansion, decline in some
components, such as new orders (Sep: 60.8; Aug: 64.9)
and productions (Sep: 55.7, Aug: 61.9), indicated the
sector remained vulnerable.
Stock market plunged as investors concern about the employment
and growth outlook in the economy. The Dow Jones
Industrial Average sank -2.1% to 9509 while S&P 500
Index lost -2.6% to 1030. Today in Asia, the MSCI Asia
Pacific Index slips -2%. Japan's Nikkei 225 Stock
Average loses -2.7% to 9715 although the nation's
unemployment rate surprisingly fell to 5.5%, compared
with consensus of an increase to 5.8%, in August from
5.7% a month ago. Japan's household spending also
unexpectedly gained +2.6% yoy in August after plummeting
-2% in July.
Gold price pulled back and closed below 1000 Thursday as USD
rallied. Apart from uncertain economic outlook, the
dollar advanced +0.65 against the euro because ECB
President Trichet said that euro's recent appreciation
has been too much and disorderly movement in the
currency market will have adverse impact on economy. The
worst performers were commodity currencies in which
Australian dollar, New Zealand dollar and Canadian
dollar plunged -1.6%, -1.2% and -1.4% respectively.
Recent strength in gold price hurt physical demand. Besides
India, Turkey reported that imports were down -86% mom
to 1.7 metric tons in September. In the first months,
total imports in the country were 32.9 metric tons,
compared with 164.6 metric tons in the same period last
year.
With 4 hours MACD crossed below signal line, Gold's recovery
from 985.5 might have completed at 1011.1 already.
Intraday bias is flipped back to the downside for 985.5
first. Break will target 61.8% retracement of 931.3 to
1025.8 at 967.4 next. On the upside, above 1011.1 will
suggest that rise from 985.5 is still in progress for a
retest on 1025.8/1033.9 resistance zone. Nevertheless,
note that note that 1033.9 is needed to be firmly taken
out to confirm upside momentum. Otherwise, we'd expected
more sideway trading below 1033.9 in near term.
In the bigger picture, rise from 681 is tentatively treated as
resumption of long term up trend. Sustained break of
1033.9 high will confirm this case and should target
61.8% projection of 681 to 1007.7 from 931.3 at 1133.2
next. While some consolidations might be seen in near
term before decisive break of 1033.9, downside should be
contained well above 931.3 support and bring rally
resumption. However, note that a break of 931.3 dampen
the bullish view and suggest that rise from 681 has
completed. This will in turn indicate that such rise is
merely part of the consolidation pattern that started at
1033.9.
Next Weeks Main Focus:
|
Day |
Date |
Time (EST) |
Country |
Event |
Period |
Survey |
Previous |
|
Sunday |
10/4/2009 |
6:30 PM |
AU |
AiG Performance of Service Index |
SEP |
- - |
48 |
|
Sunday |
10/4/2009 |
8:30 PM |
AU |
ANZ
Job Advertisements (MoM) |
SEP |
- - |
4.10% |
|
Monday |
10/5/2009 |
4:30 AM |
UK |
PMI
Services |
SEP |
54.5 |
54.1 |
|
Monday |
10/5/2009 |
5:00 AM |
EC |
Euro-Zone Retail Sales (MoM) |
AUG |
-0.50% |
-0.20% |
|
Monday |
10/5/2009 |
5:00 AM |
EC |
Euro-Zone Retail Sales (YoY) |
AUG |
-2.40% |
-1.80% |
|
Monday |
10/5/2009 |
10:00 AM |
US |
ISM Non-Manf. Composite |
SEP |
50 |
48.4 |
|
Monday |
10/5/2009 |
8:30 PM |
AU |
Trade Balance |
AUG |
-900M |
-1556M |
|
Monday |
10/5/2009 |
11:30 PM |
AU |
RBA
CASH TARGET |
6-Oct |
3.00% |
3.00% |
|
Tuesday |
10/6/2009 |
4:30 AM |
UK |
Industrial Production (MoM) |
AUG |
0.20% |
0.50% |
|
Tuesday |
10/6/2009 |
4:30 AM |
UK |
Industrial Production (YoY) |
AUG |
-8.70% |
-9.30% |
|
Tuesday |
10/6/2009 |
4:30 AM |
UK |
Manufacturing Production (MoM) |
AUG |
0.30% |
0.90% |
|
Tuesday |
10/6/2009 |
4:30 AM |
UK |
Manufacturing Production (YoY) |
AUG |
-9.30% |
-10.10% |
|
Tuesday |
10/6/2009 |
8:30 AM |
CA |
Building Permits MoM |
AUG |
- - |
-11.40% |
|
Tuesday |
10/6/2009 |
10:00 AM |
CA |
Ivey Purchasing Managers Index |
SEP |
56.6 |
55.7 |
|
Wednesday |
10/7/2009 |
5:00 AM |
EC |
Euro-Zone GDP s.a. (QoQ) |
2Q F |
-0.10% |
-0.10% |
|
Wednesday |
10/7/2009 |
5:00 AM |
EC |
Euro-Zone GDP s.a. (YoY) |
2Q F |
-4.70% |
-4.70% |
|
Wednesday |
10/7/2009 |
6:00 AM |
GE |
Factory Orders MoM (sa) |
AUG |
1.10% |
3.50% |
|
Wednesday |
10/7/2009 |
6:00 AM |
GE |
Factory Orders YoY (nsa) |
AUG |
-20.00% |
-19.80% |
|
Wednesday |
10/7/2009 |
8:30 PM |
AU |
Employment Change |
SEP |
-10.0K |
-27.1K |
|
Wednesday |
10/7/2009 |
8:30 PM |
AU |
Unemployment Rate |
SEP |
6.00% |
5.80% |
|
Wednesday |
10/7/2009 |
8:30 PM |
AU |
Full Time Employment Change |
SEP |
- - |
-30.8 |
|
Wednesday |
10/7/2009 |
8:30 PM |
AU |
Part Time Employment Change |
SEP |
- - |
3.8 |
|
Wednesday |
10/7/2009 |
8:30 PM |
AU |
Participation Rate |
SEP |
65.10% |
65.10% |
|
Thursday |
10/8/2009 |
6:00 AM |
GE |
Industrial Production MoM (sa) |
AUG |
1.80% |
-0.90% |
|
Thursday |
10/8/2009 |
7:00 AM |
UK |
BOE ANNOUNCES RATES |
8-Oct |
0.50% |
0.50% |
|
Thursday |
10/8/2009 |
7:00 AM |
UK |
BOE Asset Purchase Target |
OCT |
175B |
175B |
|
Thursday |
10/8/2009 |
7:45 AM |
EC |
ECB Announces Interest Rates |
8-Oct |
1.00% |
1.00% |
|
Friday |
10/9/2009 |
2:00 AM |
GE |
Trade Balance |
AUG |
12.0B |
13.9B |
|
Friday |
10/9/2009 |
2:00 AM |
GE |
Current Account (EURO) |
AUG |
8.5B |
11.0B |
|
Friday |
10/9/2009 |
2:00 AM |
GE |
Imports SA (MoM) |
AUG |
0.90% |
-0.20% |
|
Friday |
10/9/2009 |
2:00 AM |
GE |
Exports SA (MoM) |
AUG |
1.70% |
2.30% |
|
Friday |
10/9/2009 |
4:30 AM |
UK |
PPI Input NSA (MoM) |
SEP |
-0.80% |
2.20% |
|
Friday |
10/9/2009 |
4:30 AM |
UK |
PPI Input NSA (YoY) |
SEP |
-6.80% |
-7.50% |
|
Friday |
10/9/2009 |
4:30 AM |
UK |
PPI Output n.s.a. (MoM) |
SEP |
0.10% |
0.20% |
|
Friday |
10/9/2009 |
4:30 AM |
UK |
PPI Output n.s.a. (YoY) |
SEP |
-0.10% |
-0.40% |
|
Friday |
10/9/2009 |
4:30 AM |
UK |
PPI Output Core NSA (MoM) |
SEP |
0.20% |
0.20% |
|
Friday |
10/9/2009 |
4:30 AM |
UK |
PPI Output Core NSA (YoY) |
SEP |
0.90% |
0.70% |
|
Friday |
10/9/2009 |
4:30 AM |
UK |
Visible Trade Balance GBP/Mn |
AUG |
-£6300 |
-£6479 |
|
Friday |
10/9/2009 |
4:30 AM |
UK |
Trade Balance Non EU GBP/Mn |
AUG |
-£3600 |
-£3925 |
|
Friday |
10/9/2009 |
4:30 AM |
UK |
Total Trade Balance (GBP/Mln) |
AUG |
-£2300 |
-£2447 |
|
Friday |
10/9/2009 |
7:00 AM |
CA |
Unemployment Rate |
SEP |
8.80% |
8.70% |
|
Friday |
10/9/2009 |
7:00 AM |
CA |
Net Change in Employment |
SEP |
-7.5K |
27.1K |
|
Friday |
10/9/2009 |
8:30 AM |
US |
Trade Balance |
AUG |
-$33.0B |
-$32.0B |
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