U.S. Session Recap – May 5, 2014

  • US NFP prints at 288K vs. 218K expected and 203K previous
  • US unemployment rate down from 6.7% to 6.3%
  • US participation rate down from 63.2% to 62.8%
  • US average earnings clocks in at 0.0% vs. 0.2% previous
  • US factory orders disappoints at 1.1% vs. 1.5% last month
  • Japanese markets out on Children’s Day holiday
  • UK markets out on May Day holiday

Volatility alert! Non-farm payrolls (NFP) days usually inspire volatility among the major currencies and last Friday was no exception.

For starters, the much-awaited NFP data blasted its expectations and came in at 288,000, the largest increase since January 2012. The unemployment rate also surprised market players by dropping from 6.7% to 6.3%, a low not seen since September 2008.

Not surprisingly, the Greenback popped higher across the board at the news. During the first hour after the NFP’s release, the dollar had gained around 55 pips on the euro, pound, franc, and the Loonie and strengthened by almost 70 pips against the Aussie, Kiwi, and the yen. Unfortunately for the bulls, the Greenback also wiped out its gains by the end of the U.S. forex trading session.

Analysts point to the details of the NFP for explanation. See, the labor participation rate had fallen to its 35-year low as a total of 806,000 workers dropped out of the labor force. Not only that, but average earnings also stagnated at 0.0%, suggesting that there was no wage growth for those who have jobs. Last but not the least, the factory orders report had missed estimates with only a 1.1% growth in March.

Will the Asian session traders extend the dollar’s decline? The Japanese markets will be out on Children’s Day holiday today but Australia is set to print its AIG services PMI report at 11:30 am GMT. Then, it will also print its building approvals and ANZ job ads numbers at 1:30 am GMT. Finally, China will be releasing its HSBC final manufacturing PMI at 1:45 am GMT.

These reports could dictate the comdolls’ price action for the rest of the trading session so y’all better keep your eyes on them!

See also:

London Session Recap

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