U.S. Session Forex Recap – Dec. 3, 2015

  • U.S. ADP Nov non-farm employment up by 217K vs. 191K expected
  • U.S. ADP Oct non-farm employment revised from 182K to 196K
  • Fed head Yellen confident about inflation outlook in today’s testimony
  • BOC kept interest rates on hold at 0.50% as expected
  • U.S. crude oil inventories up from 1M to 1.2M barrels
  • WTI crude oil down to $40/barrel, Brent crude oil down to $42.73/barrel
  • Saudi Arabia and Gulf States willing to cut oil output?

It’s all about volatility, baby! A number of top-tier events and announcements rocked the forex market boat in today’s New York trading session, leading to sharp rallies and quick reversals all over the place.

Major Events:

Upbeat ADP jobs numbers – Upside surprise in the ADP means a strong NFP? Maybe! The ADP non-farm employment change report, which is sometimes considered a leading indicator for the actual non-farm payrolls data due a couple of days from now, printed a higher than expected 217K increase in hiring versus the estimated 191K gain for November. To top it off, the previous reading was upgraded from 182K to 196K, getting dollar bulls all giddy about potential positive revisions for the NFP as well.

Yellen’s hawkish testimony – As though the U.S. economy hasn’t heard enough good news, Fed head Janet Yellen ditched her usual cautious vibe and shared a few hawkish hints. In her latest testimony, she expressed confidence in the Fed’s growth and inflation outlook. She also shared that waiting too long to tighten monetary policy might do more harm than good. All systems go for a liftoff this month then?

BOC interest rate statement – As expected, the BOC kept interest rates on hold at 0.50% during their latest policy decision. The central bank admitted that domestic demand has been less robust than expected and that falling oil prices are keeping a lid on inflation. Nothing we haven’t heard before.

Oil price movements – It seems that oil prices are stealing the show again these days, especially since the OPEC announcement is nearing. WTI crude oil and Brent crude oil both tumbled in the past few hours upon seeing an increase in U.S. crude oil stockpiles from 1 million to 1.2 million barrels. However, rumors that Saudi Arabia and Gulf states are willing to cut oil output led to a quick bounce towards the end of the session.

Major Currency Movers:

CAD – The BOC announcement and the volatility in oil prices spurred a few spikes here and there for the positively correlated Canadian dollar.

USD/CAD surged to an intraday high of 1.3406 when oil started sliding then dropped to an low of 1.3308 (-0.02%) after the BOC statement. CAD/JPY spiked to 92.68 then crashed to a session low of 92.12 soon after. EUR/CAD dipped to 1.4070 before popping back up to test the resistance at 1.4200.

GBP – The British pound was still bleeding heavily after getting beaten up on the release of its construction PMI during London trading session.

GBP/USD dipped to a low of 1.4893 before recovering back above 1.4900 (-0.88%), GBP/JPY broke below the near-term support at 184.50 then fell to a low of 183.96 (-0.62%), EUR/GBP was nonstop in its ascent to the .7100 handle (+0.73%), and GBP/AUD broke below the 2.0500 handle and found support around 2.0400 (-0.71%).

Watch Out For:

  • 1:30 am GMT: Australian trade balance (-2.61B AUD expected, -2.31B AUD previous)

See more:

Asian Session Recap

London Session Recap

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