Dollar jumps sharply in early US session after release of better than expected employment data. The non-farm payroll report showed 200k expansion in the job market in December, beating expectation of 150k. Prior month’s data, though revised down, still stood at 100k level. October’s number was revised up to 112k. The total number for Q4 was 412k, below Q3′s 441k but wasn’t too away. Total number for 2011 was at 1.6m, much better than 2010′s 940k. Unemployment rate unexpected dropped further to 8.6%, the lowest number since February 2009. After all, the numbers were positive and gave risk appetite a boost. Dollar is seen stronger against European majors and yen after NFP. USD/CHF’s break of 0.9547 suggests that recent rally has finally resumed and we’re looking at the prospect of … Read entire article »

Sovereign debt problems in the Eurozone will continue to dominate financial markets this year. While we believe European finance ministers will eventually resolve the crisis, the situation will probably worsen in the medium-term. The euro, which got hammered in 2011, will remain under pressure in months ahead. In our opinion, high risk premium regarding owning the single currency and ECB’s monetary easing are key factors dragging on the currency. What worries investors the most is the drying-up of the European banking system. Widening of LIBOR-OIS spread and EUR/USD basis swaps has signalled the finding pressures facing European banks. It’s also shown that banks in the region are increasingly reliant on the ECB for capital. Economic condition in the Eurozone deteriorated markedly last year. GDP expanded +0.2% in 3Q11 from a quarter … Read entire article »

By: Barbara Zigah The Euro continues to come under pressure in Asian trading, hovering near to a 16-month trough against the U.S. Dollar, and analysts expect more declines ahead. As the first full trading week of the new year draws to a close, market players worry that there is little relief in sight, with two key bond sales ahead next week. As a result, a large sell-off has been taking place, driven primarily by hedge fund operators. As reported at 11:21 a.m. (JST) in Tokyo, the Euro was against the greenback at $1.2794, slightly off the $1.2770 low struck yesterday on the EBS trading platform. Analysts say that some support for the common currency is pegged near $1.2600. A market economist in Tokyo said that markets are waiting for news on … Read entire article »

The record ADP number from US yesterday was overshadowed by intensifying worry on the never-ending European debt crisis. The anticipated risk rally didn’t happen even though DOW, FTSE and DAX managed to close nearly flat. Asian markets are mostly down with Nikkei losing over -110 pts and put most currencies under renewed pressure against dollar. Investors will turn their focus to today’s Non-farm payroll report for inspirations. But the tug-of-war between US recovery and European debt will continue and offset each others’ impact on markets. Regarding the non-farm payroll report today, markets are expecting 150k job growth in December with unemployment rate back up from 8.6% to 8.7%. Most of the leading indicator to NFP are positive. That includes yesterday’s record ADP job growth of 325k. Four weeks moving average … Read entire article »