Friday’s US employment data was extremely encouraging, with the headline non-farm payrolls coming in much stronger than expected at 243k (compared to consensus estimates looking for 140k), and the unemployment rate unexpectedly dropping to 8.3% from 8.5% prior. The release led to a short-term uptick in risk sentiment characterized by a decent rally in USDJPY above 76.70 levels, but that good news has now been overshadowed by renewed Greece concerns at the start of this week.
Frustratingly, the negotiations between Greece and its private sector creditors on the terms of a new bond swap have still not reached a conclusion, despite the talks dragging on for far longer than most of the market had expected and even beyond the timeline envisaged by European officials. On Thursday, the EU’s Rehn asserted that he expected the deal to be thrashed out before the end of last week, but this target has clearly not been met and patience is wearing thin that “soon” is not soon enough.
During the Asian session, Australian retail sales came out at a weaker than expected -0.1% MoM for December (+0.2% expected), which has further dampened the mood. Despite both the uncertainty in Europe and weak data, equity markets have put in a resilient performance, with the Nikkei up 1.1%, and both the Hang Seng and Shanghai Composite staying flat on the day.
Today’s session is lean on important data releases, with Eurozone Sentix investor confidence and German factory orders taking top billing. Later in the week however, we have the RBA, BoE and ECB all holding policy meetings which should garner significant attention and perhaps prompt some further FX volatility.
By
Frustratingly, the negotiations between Greece and its private sector creditors on the terms of a new bond swap have still not reached a conclusion, despite the talks dragging on for far longer than most of the market had expected and even beyond the timeline envisaged by European officials. On Thursday, the EU’s Rehn asserted that he expected the deal to be thrashed out before the end of last week, but this target has clearly not been met and patience is wearing thin that “soon” is not soon enough.
During the Asian session, Australian retail sales came out at a weaker than expected -0.1% MoM for December (+0.2% expected), which has further dampened the mood. Despite both the uncertainty in Europe and weak data, equity markets have put in a resilient performance, with the Nikkei up 1.1%, and both the Hang Seng and Shanghai Composite staying flat on the day.
Today’s session is lean on important data releases, with Eurozone Sentix investor confidence and German factory orders taking top billing. Later in the week however, we have the RBA, BoE and ECB all holding policy meetings which should garner significant attention and perhaps prompt some further FX volatility.
By
M.Zohaib Gadit
Forex Trading Consultant
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