NFP Beats By 60K Sending USD Higher June 8, 2015
NFP Better Than Expected By 60K But Unemployment Rate Rises
I have to admit I didnt think NFP would be that much better than expected. While that does somewhat increase the probability of a rate increase this year, even if its just a token they take back at the very next meeting. What doesnt make much sense is that if the US is creating closer to the magic 300K jobs, why did the unemployment rate tick upwards? Seems odd to me but as usual nothing should be surprising in todays new, new normal. Just to top the day off we also heard from Fed member Dudley saying it yet again.
- DUDLEY SAYS FED STILL LIKELY TO START RAISING RATES THIS YEAR
However that was just a small part of the speech of which the majority was more vague and again data dependent along with market reaction.
- “The appropriate stance of monetary policy will be influenced by how financial market conditions respond to the Federal Reserve’s actions,”
- If conditions tighten sharply, Fed is likely to proceed more slowly; officials would move more quickly under opposite scenario
- “We will adjust the policy stance to support the financial market conditions that we deem are most consistent with our employment and inflation objectives”
- Timing of any FOMC decision will still be based on incoming data
- Growth should pick up “somewhat” for rest of yr; uncertainty remains on whether it will lead to further labor mkt improvement
- Some forces restraining growth are likely to fade
- Consumer spending should grow if households become more confident about their finances
- 2Q rebound appears to be “relatively muted”
Sounds more like a wish wash of maybes to me but in such cases I would be more happy to be wrong. Lets just hope the data actually improves without having to seasonally adjust the seasoned data. Then we will see a rater increase that has somewhat of a chance of getting back to normal policy. We shall see but Im not holding my breath.
EUR/USD Runs Second Push Down
We have a second push scenario on the EUR/USD so I will only be looking to short during the London session today. The best level is up at 1.1136 but if they do manage to widen the Asian range there is a good chance the Asian highs at the hourly 200 holds as well.
GBP/USD Also Makes Second Push On NFP
The GBP/USD managed to finish its first push and make the second last Friday thanks to NFP data. We should see this continue but if there is any Greek tape bombs today we could see this pair run opposite the EU as the EG takes a beating. The best level to short is 1.5274 while there is potential for a test up to 1.5300 before any USD strength kicks in. I will be more cautious of this pair if I see the EUR/GBP dropping with conviction.
EUR/JPY Has Second Intraday Push
I would be happier shorting the EUR/JPY since it does have a second intraday push but I am cautious of any USD strength kicking in pulling the UJ up. Of which is why we dont have conviction into Fridays lows last week. Seeing the conviction below during London will open the door for a continuation entry at 139.08. If these lows hold I will be open for the short at 139.72 but if this pair is moving with the UJ I will be more cautious.
Forex News Today
The calendar is rather bare today so baring a Greek tape bomb movement should be relatively slow. Having said that the potential for some sort of news from Greece is pretty good. Over the weekend the Greek PM was snubbed by Jean Claude Junker after refusing to agree to the latest proposal made by the Troika. In short the potential for a drastic move by Greece is rather high.
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