U.S. Session Forex Recap – Dec. 2, 2016

  • Initial jobless claims at 268K vs. 252K expected, 251K previous
  • ISM manufacturing PMI up from 51.9 to 53.2 in Nov vs. 52.1 forecast
  • Challenger job cuts down 13% vs. previous 39.1% drop

The Greenback was in a weak spot against its forex rivals as U.S. equities closed mostly lower, even though economic data wasn’t all that bad.

Major Events:

Mixed U.S. reports – Economic reports turned out mixed, with the ISM manufacturing PMI posting a larger than expected rise from 51.9 to 53.2 in November versus the projected 52.1 reading. This reflects a much stronger pace of industry growth, buoyed by gains in new orders, production, and supplier deliveries. The jobs component fell from 52.9 to 52.3 to indicate a slowdown in hiring.

Initial jobless claims also posted a larger increase in unemployment, as the reading stood at 268K versus the projected 252K figure and the earlier 251K reading. Challenger job cuts fell 13%, a slower pace of decline compared to the previous 39.1% drop. Now these reports probably had a few market participants bracing themselves for a downside surprise in today’s jobs release so don’t forget to read our NFP Trading Guide if you’re playing the report.

French President Hollande backs out of race – After keeping French voters in suspense for quite some time, French President Francois Hollande officially announced that he won’t be seeking another term.

“As a Socialist, because that is my life’s commitment, I cannot accept, I cannot come to terms with the dispersion of the left, with its splitting up,”  stated Hollande. “Because that would remove all hope of winning in the face of conservatism and, worse yet, of extremism.” 

Keep in mind that, even though his ratings have tanked due to persistently high unemployment and rising populist sentiment in France, his decision to drop out of the race brings more uncertainty to the mix. This leaves Les Républicains candidate Fillon to go head to head with Front National leader Marine Le Pen, along with whoever wins the Socialist party primaries, in the elections next year. To find out why this is such a big deal, make sure you read Forex Gump’s article on What You Need to Know About the French Elections.

Major Market Movers:

USD – Dollar bulls took a much-needed break to prep for today’s top-tier events. USD/JPY retreated from 114.31 to 114.02 (-0.25%), EUR/USD popped up from 1.0615 to 1.0670 (+0.52%), and AUD/USD bounced from .7388 to .7430 (+0.57%).

CAD – The Loonie extended its gains, fueled by the OPEC’s decision to cut production by January to keep oil prices supported. USD/CAD slid from 1.3413 to 1.3293 (-0.89%), CAD/JPY advanced from 85.15 to a high of 85.98 (+0.92%), and EUR/CAD dropped from 1.4258 to a low of 1.4127 (+0.92%).

Watch Out For:

  • 12:30 am GMT: Australian retail sales (0.3% expected, 0.6% previous)

See also:

London Session Recap

Asian Session Recap

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