The headline nonfarm payroll number was much weaker than expected and confused traders because it was so wide of the April 5 ADP release of 263,000, but the rest of the data was tepid though not weak enough to dissuade the FOMC from further efforts to raise rates. The important average hourly earnings was up 0.2%, in line with expectations, but the weekly hours worked slipped 0.1, which may have been in response to the early March storms. The unemployment rate dropped to a recovery low of 4.5% but that may be because of the amount of workers having left the labor force. The markets’ initial reaction to the headline NFP was the bonds rallied, the dollar weakened and the precious metals rose. By day’s end all the moves reversed from early rallies inspired by the U.S. missiles fired at Syria. The market had deemed the cruise missiles fired at the air force base in Syria as a market destabilizing event, spurring a purchase of what are deemed safe haven assets: GOLD, YEN, BONDS. But the end of day reversal nullified Syria as a one-off event. So the market is confused as to the genuine impact of the unemployment report and we will have to wait for more economic data to weigh all the “communication” coming from FED speakers. Chair Yellen will be speaking with a Q&A session on Monday afternoon so late market action should not be discounted.
Posts Tagged ‘trade’
First, let me apologize to my readers. I erred when I said Marine Le Pen made it to the second round of the 2012 French presidential election. Reader Al 13 corrected me. It was her father Jean-Marie Le Pen who made it to the second round in 2002 and got trounced, garnering 18% of the vote to Jacque Chirac’s 82%. But read Al 13’s comment on the previous post because he notes that if the second round were to be a choice between Le Pen and one of the two far-left candidates–Melenchon or Hamon–the impact would be highly volatile for European markets.
The statements coming from G-20 central bank chiefs and finance ministers in South Korea tried to calm the markets nervousness about currency wars. Brazilian Finance Minister Guido Mantega didn’t attend as a form of mild protest to what he felt was previous inconsistencies between words and actions. The U.S. had put forth a proposal that was leaked to the media ahead of formal proceeding for some numerical target on current account surpluses and deficits. In the final communique no formal targets were established.