FxBriefs Weekly Wrap Up

Having trouble viewing this email? Click here to view in your browser. Forward this newsletter to a friend. WEEKLY WRAP UP: June 8, 2013 FxBriefs US wrap: Payrolls hit the sweet spot JUN. 7, 2013 19:50 GMT US non-farm payrolls rise 175,000, unemployment rate ticks up to 7.6% Canada adds an astounding 95,000 jobs to an economy 1/10 the size of the US Italian FinMin Saccomanni: Euro may be too strong for the regions exporters Fed’s Plosser: Fed should begin to taper now but won’t; unclear size or timing of taper US consumer credit rises $11.1 bln in April S&P 500 rebounds 1% US 10-year yield rises 8.5 bp to 2.16% as Fed taper fears revived following payrolls Extraordinary volatility greeted the market in the immediate aftermath of US employment report. The knee-jerk reaction was to cover dollar shorts and the dollar shot higher, for a few seconds. It then crashed, only to recover sharply moments later. EUR/USD fell to 1.3190 is the wake of the report before soaring to 1.3284 moments later. It fell to session lows of 1.3190 before stabilizing. It traded in narrow ranges for the balance of the US session and ends at 1.3220. USD/JPY jumped to 96.40 after the report before skidding sharply to 94.99 after which it rebounded and brushed 97.50. The volatility was simply breathtaking. The rebound from the 95.00 region was so sharp that inevitable talk of Japanese intervention made the rounds, though that was unconfirmed. Far more likely was buying from a quasi-governmental entity linked to the Japanese government which traders viewed more plausibly. USD/JPY spent a range-bound afternoon just below the 50% retracement of the drop from near 100.50 at midweek to 95.00 this morning at 97.75. We end near 97.50, a result for beleaguered USD/JPY longs. The US employment rates keeps the “taper in September” consensus on track. A move back below support in the 1.3175/95 region would be a signal to me that EUR/USD has topped for this move. FX Briefs European wrap: Continued yen strength very much the main feature JUN. 7, 2013 10:36 GMT Japan’s Hamada: BOJ should ease monetary policy if yen rises further German EconMin: Japan policy of money flooding ‘big mistake’ German April industrial output +1.8% m/m, much stronger than median forecast of flat ECB’s Nowotny: Euro area is weak spot for global economy China’s PBOC: 2013 global economy to be complicated. Continued low growth Merkel: Sees severe weaknesses in the architecture of the EMU Merkel: Can’t fight euro crisis with economic stimulus measures Bundesbank cuts 2013 German GDP forecast to 0.3% from previous 0.4% EU’s Rehn: Access to finance is ‘major bottleneck’ German April trade surplus 17.7 bln, better than median forecast of 17.2 bln French April trade deficit -4.5 bln UK April total goods and services trade deficit -2.579 bln USD/JPY down at 95.75 from early 96.90, having plunged to a session low 95.52 after comments from the German Economy Ministry criticizing Japanese monetary policy (see headline above) EUR/JPY down at 126.80 from early 128.30. Comment from Abe’s advisor Hamada, that BOJ should ease monetary policy if yen rises further, put no pressure on the yen whatsoever. Indeed the yen strengthened straight after the comment hit the wires. EUR/USD effectively unchanged at 1.3247.  Talk of buy orders clustered down at 1.3220/25 (said to include US investment bank interest) and they curtailed early slippage. Much better than expected German industrial output (see above) then triggered recovery. Cable touch lower at 1.5570 from early 1.5595. Fxbriefs Asian wrap: AUD… down and out in Asia JUN. 7, 2013 05:19 GMT Oi Rehn should resign for crimes against Greece and economics – AEP Telegraph Majority of House members want currency crackdown Aso: Watching currency moves, no immediately need to intervene MOF’s Yamasaki: We will announce medium term fiscal plan in summer Amari : FX market is reacting to unstable factors overseas Volatility has be solved by improving real economy Pimco’s Masanao: Carry trade unwinding on Fed and BoJ speculation Australian May Construction Index 35.3 Soros returns to Japanese stock market USD/JPY early dollar strength towards 97.50 quickly evaporated, after Nikkei opened down 1.5%. We started to slide towards 97.10, comments from Aso,(no immediate need to intervene), sent the pair tumbling towards 96.60. As the Nikkei went further in the red, the pair moved through 96.00, en route to a session low of 95.55. A recovery towards 96.20 was seen late in the session with the Nikkei paring back some losses. AUD/USD opened around 96 cents and was sold immediately down to 9550 by a US based fund. We consolidated around that level until the JPY started to strengthen. Real money, algos, macros account were all heavy sellers of AUD crosses, yesterday’s low  of 9496 soon gave way, liquidity became  an issue, the ” Aussie ” gapped to 9464 low. A mild recovery was staged by profit taking, the pair rose to  9530, but was again met  with macro sellers, happy to fade a rally. We finished the session trading close to 9500. Good luck with the NFP Peter Was this email forwarded to you? Sign up to start receiving your own copy and download a free report. 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