Mid-Day Report: Little Reaction to Bad Non Farm Payroll Report

Market Overview | Written by ActionForex.com | Nov 07 08 14:39 GMT |

Markets showed little reaction to a bad non-farm payroll report today. Dollar is mildly lower but remains in range against majors. Stocks even open higher. Non Farm Payroll report released today showed -240k contract in Oct, much worse than expectation of -200K. Sep's figure was even worse after downward revision from -159k to -284k. Sep and Oct together recorded the worse two month slide since 2001. Unemployment rate surged much more than expected to 6.5%, highest level since 1994. Canadian dollar, on the other hand, is lifted by unexpected expansion in the employment market. Canada added 9.5K jobs in Oct versus consensus of -10K. Unemployment climbed to 6.2% though. Other data released earlier saw Swiss unemployment rate rose from 2.4% to 2.5% in Oct. Germany Trade surplus cam in at 13.7b. Germany industrial production dropped sharply by -2.1% mom, -3.6% yoy in Sep. USD/JPY Mid-Day Outlook Daily Pivots: (S1) 97.26; (P) 97.96; (R1) 98.44; More. USD/JPY recovers mildly but after all it's still staying in tight range of 96.35 and 100.54. Outlook remains neutral for the moment. As discussed before, rebound from 90.92 could have completed at 100.54 already. Break of 96.35 minor support will confirm and bring deeper decline to retest 90.92 low. On the upside, above however, 100.54 will indicate that such rise from 90.92 is still in progress for 103.06 cluster resistance (61.8% retracement of 110.66 to 90.92 at 103.12). In the bigger picture, stronger than expected rebound from 90.92 mixed up the near term picture. Nevertheless, as long as 103.06 cluster resistance holds, medium term outlook remains bearish. Prior break of 95.77 low confirms that whole down trend from 124.13 has resumed and should target 100% projection of 124.13 to 95.77 from 110.66 at 82.3 next. Also, note that the current development clears out the long term picture too. Price actions that started from 79.75 (95 low) has completed in form of a triangle that needed with five waves to 124.13. In other words fall from 124.13 is just part of an even larger scale down trend which could extend further to retest 79.75 low. On the upside, sustained break of 103.06 cluster resistance will firstly argue that fall from 110.66 has completed. Secondly, it will also argue that a medium term low is in place at 90.92 and outlook will be turned neutral with focus back to 110.66 high.

Economic Indicators Update

GMT	Ccy	Events	Actual	Consensus	Previous	Revised
06:45	CHF	Swiss Jobless rate Oct	2.50%	2.50%	2.40%
07:00	EUR	Germany Trade balance (euro) Sep	13.7B	13.7B	13.1B
07:00	EUR	Germany Current account Sep	15.0B	10.3B	7.3B	7.5B
07:00	EUR	Germany Export M/M Sep	0.70%	0.40%	-0.50%	-0.30%
07:00	EUR	Germany Import M/M Sep	0.90%	-1.40%	-2.50%	-2.70%
11:00	EUR	Germany Industrial prod'n M/M Sep	-2.1%	-2.00%	3.40%	1.60%
11:00	EUR	Germany Industrial prod'n Y/Y Sep	-3.60%	-0.50%	1.70%	3.20%
12:00	CAD	Canada Unemployment rate Oct	6.20%	6.20%	6.10%
12:00	CAD	Canada Jobs change Oct	9.5K	-10.0K	106.9K
13:30	USD	U.S. Non-farm payrolls Oct	-240K	-200.0K	-159.0K	-284K
13:30	USD	U.S. Unemployment rate Oct	6.50%	6.30%	6.10%
13:30	USD	U.S. Avg. hourly earnings M/M Oct	0.20%	0.20%	0.20%
13:30	USD	U.S. Avg. hourly earnings Y/Y Oct	3.50%	3.50%	3.40%
15:00	USD	U.S. Pending home sales Sep		N/A	93.4M
15:00	USD	U.S. Pending home sales M/M Sep		-3.00%	7.40%
15:00	USD	U.S. Wholesale inventories Sep		0.30%	0.80%