Forex Investment and Currency Trading

The focus today is on the Chinese stimulus package that was announced over the weekend, and the comments coming out of the G20 meeting this past weekend. G20 finance ministers and central bankers spoke dovishly on interest rates and advocated taking further action. We could see more concrete measures come out of this coming weekend’s meeting of G20 heads of state. China’s stimulus package sent a wave of optimism through the markets, with equity markets up in Asian and Europe, equity futures up in North America, and commodity prices up across the board. Yen crosses are all higher as risk [...]

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US Non-farm payrolls fell -240K in October and September’s decline was revised from -159K to -284K. The only sectors to see job growth were government, education and health jobs. The unemployment rate rose from 6.1% in September to 6.5%, which is above the peak reached after the 2001 recession and now the highest rate since March 1994. September pending home sales fell -4.6%. Although pending sales remain at a level consistent with September existing home sales of 5.18mn, credit market turmoil may have prevented contracts from making it to closing in October, providing downside risk to the October existing sales [...]

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CAD
The tone in USDCAD shifted over the last two days, and it’s now heading higher. The sharp downturn in equities and end to the brief risk-seeking rally has USDCAD looking upwards again. The stronger than expected Canadian employment number actually sent USDCAD higher, while there was little movement against the crosses. With no further data in Canada today, the focus is going to be on nonfarm payrolls and US equities.
Majors
Markets were fairly quiet overnight, awaiting today’s nonfarm payrolls report. The USD pared some of the gains it made yesterday and European equity markets spent the night in positive territory, though [...]

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US non-farm payrolls came in within bleak expectations, -240k, biggest drop in 7 years, with downward revisions for Sept. and Aug. totaling -179k and the unemployment rate higher at 6.5%.  Euro/yen initially crashed 2 yen to below support on risk aversion theme but recovered as equity futures rose, traders citing the unemployment data wasn’t as bad as could have been.  The Dow opened higher, Treasuries are off, and Euro is back above 1.28 while dollar/yen is testing 98 session high.  Market strategists note the unemployment rate is consistent with weak “jobs hard to get” category in latest confidence report and [...]

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The US election has now come and gone, after nearly two full years of campaigning. There were no big surprises, with Democrat Barrack Obama winning the Presidency, and the democrats controlling both the house and the senate, though it appears that they fell short of the 60 Senate seats that would enable them to push bills to a vote by overcoming filibusters. The markets will probably see this as a good thing. The USD initially rallied overnight, but has since reversed most of its gains against the Euro, and Sterling. The Australian dollar lost ground overnight after its federal government [...]

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