All the US economic recovery euphoria disappears in a couple of days of poor employment data. Currency Market Updates reports that the week started with one US institution talking of a much better than market consensus, non-farm payrolls figure, (NFP) being released today.
Since then, we have had a worse than expected ADP employment number and higher than expected jobless claims alongside economic data and surveys reported weaker than had been expected. And this from the largest economy in the world (for the present anyway).
This leaves ‘scribblers' re-writing their estimates for this afternoon's figure with the emphasis, who can come up with the least positive figure. The consensus is still for a drop of about 150-170K, which would not be too bad given it would signal the second consecutive month in which the job loss number had narrowed by about 60K, but I have seen a report this morning that the figure could be as high as -250K. We have seen a big risk aversion shift with equities off again, bond and gilt yields down and the Dollar stronger.
Oil is lower and gold has taken a breather from its seemingly inexorable rise towards $1200. The break down through 1.4550 versus the Euro is proving a tough nut to crack however, and despite several attempts at getting beyond this level, the invisible elastic thread is so far successful in reeling the rate back. Given that we are not due significant data until the aforementioned US non-farm payrolls, the market would expect this pattern to be reproduced throughout the morning session.
That said, there is plenty to keep an eye on.. The Ecofin grouping of all EU Finance Ministers are meeting for a 2nd day today in Gothenburg. Yesterday they discussed stimulus exit strategies, the recent G20 meeting in Pittsburgh and probably most relevant, the upcoming G7 meeting with a focus on the strength of the Euro.
Also today, Ireland are voting for the 2nd time on the Lisbon Treaty - a Yes result is vital to the ongoing development of the EU as an entity. Latest polls indicate a swing towards a YES result (55% for, 27% against and 18% don't know) but markets will keep in the back of their minds that a rejection of the EU constitutional treaty by France and The Netherlands in 2005 caused a slump in the Euro's value. The official result is due sometime on Saturday, so again the markets wait.
