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The strongest to weakest of the major currencies

The GBP is the strongest and the JPY is the weakest as the NA session begins. The USD is mixed to higher ahead of the key US jobs report to be released at 8:30 AM ET. The pundits are looking for:

  • Consensus estimate +170K (range +90-+256K)
  • Private +160K
  • Prior month (August) +187K
  • Unemployment rate consensus estimate: 3.7% vs 3.8% prior
  • Participation rate consensus 62.8% prior
  • Prior underemployment U6 prior 7.1%
  • Avg hourly earnings y/y exp +4.3% y/y vs +4.3% prior
  • Avg hourly earnings m/m exp +0.3% vs +0.2% prior
  • Avg weekly hours exp 34.4 vs 34.4 prior

The job related data so far:

  • ADP report +89K vs 153K expected and +180K prior (weaker MoM)
  • ISM services employment 53.4 vs 54.7 prior (weaker MoM)
  • ISM manufacturing employment 51.3 vs 48.5 prior (stronger MoM
  • Challenger Job Cuts -58.2% y/y vs -266.9% prior (stronger MoM)
  • Philly employment -5.7 vs -6 prior (about the same)
  • Empire employment -2.7 vs -1.4 prior (weaker MoM)
  • Initial jobless claims survey week 202K vs 232K last month (stronger MoM)

Despite the data and expectations, it is always a coin flip. A wiggle here or there from consensus and markets move. The USD is a bit higher (but mixed), with the USDJPY moving the most. That currency pair is up 0.38% and in the process moved back above the 50% midpoint of the move on from the September 21 low at 148.734. It is also approaching the near-converged 100 and 200 hour moving averages between 149.15 and 149.20. Through the jobs report, a move above the aforementioned moving averages would be more bullish. The chart below shows the other technical targets to the upside. Conversely, a move below the 50% midpoint would be more bearish. The technical targets are outlined to the downside as well. A stronger report will send the USDJPY higher (all things equal). The weaker report will go lower. Look for momentum in the direction of the break. Extending below the targets increases the bullish or bearish bias with markets and looking for the next hurdle (see video from late yesterday here).

The focus is not purely on the US jobs report, but Canada will also release their employment data. Estimates are for the

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  • Employment change to rise by 22.1K versus 39.9 last month.
  • The unemployment rate is expected at 5.6% versus 5.5%.
  • Last month full-time employment was at 32.2 K.
  • Part-time employment was at 7.8 K.
  • The participation rate was 65.5%

A snapshot of the markets as the NA session gets underway shows:

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  • Crude oil is trading near unchanged at $82.25. At this time yesterday the price was trading at $82.76
  • Spot gold is trading up $1.90 or 0.11% at $1821.90. At this time yesterday the price was trading at $1821
  • Spot silver is trading up $0.16 or 0.76% at $21.11. At this time yesterday, the price was trading at $21.07
  • Bitcoin is trading at $27,731. At this time yesterday, the price was trading at $27,588.

In the US premarket for US stocks, futures are implying a modestly higher open

  • Dow Industrial Average futures are implying a gain of 25 points after yesterday’s -9.90 point decline
  • S&P index futures are implying a gain of 3.1 points after yesterday’s fall of -5.58 points
  • NASDAQ futures are implying a rise of 17.5 points after yesterday’s -16.18 point decline

The NASDAQ index is unchanged for the week coming into today. The S&P index is down -0.70%, while the Dow Industrial Average is down -1.16%.

In the European equity markets, the major indices are trading higher:

  • German DAX, up 0.74%. For the week the index is down -1.33%
  • France’s CAC, up 0.64%. For the week the index is down -1.28%
  • UK’s FTSE 100, up 0.39%. For the week the index is down -1.67%
  • Spain’s Ibex, up 0.59%. For the week the index is down -2.30%
  • Italy’s FTSE MIB, -0.06% (10 minute delay)

In the US debt market, yields are modestly lower:

  • 2-year yield, 5.043% up 1.8 basis points. At this time yesterday, the yield was at 5.026 %
  • 5-year yield, 4.711% up 2.7 basis points. At this time yesterday the yield was at 4.685%
  • 10-year yield, 4.744% up 2.8 basis points. At this time yesterday, the yield was at 4.71%
  • 30-year yield, 4.912% up 2.5 basis points at this time yesterday, the yield was at 4.86%
  • The 2 – 10 year spread is trading at -29.7 basis points as he continues to work off its negative yield curve. At this time yesterday, the spread was at -31 basis points.

In the European debt market, benchmark 10-year yields are trading higher:

European benchmark 10 year yields

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