Article Highlights

  • Mixed Trade Balance data from Europe: Germany 14.2B EUR vs. 17.3B EUR forecast; France -5.21B EUR vs. -5.05B EUR forecast
  • Swiss Retail Sales y/y:   2.3% vs. 4.2% previous
  • U.K. Manufacturing Production m/m: 0.3% vs. 0.6% forecast; Industrial Production m/m: 0.4% vs. 0.6% forecast
  • U.S. Non-Farm Payrolls net change forecast at +183K, unemployment rate forecast: 6.7%.
  • Canadian net jobs change forecasted at +20K; unemployment rate at 7.1%
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We got a good amount of data from the morning London session, including mixed trade data in Europe and a lower read on Swiss retail sales, but the main event was the U.K. manufacturing data.  The monthly read came in lower than expected, as well as the year-over-year read at 1.5% vs. 2.3% forecast.  The reaction in currencies were pretty muted, which is typical ahead of today’s main market event: the U.S. jobs data. In general, we’re seeing weakness in the euro (EUR/USD down -0.17% to 1.3566), broad strength in sterling (GBP/USD up 20 pips to 1.6340), and the Japanese yen is pretty much flat against the Greenback on the session trading at 102.12.

The U.S. Non-Farm Payrolls report is once again a highly anticipated event as traders are anxious to see if the U.S. will bounce back from the weak December number, if we’ll see revisions to the previous reads, and how the unemployment rate may or may not change. Another weak net change number or drop in the unemployment rate could spark traders to price in a potential change in mindset for Janet Yellen and what the Federal Reserve may decide to do in March.

Also to be released at 1:30 pm GMT is the Canadian jobs report. While not as big a market mover the NFP report is, this data point can easily spark above average volatility in the Loonie, especially in the cross pairs like GBP/CAD, EUR/CAD and AUD/CAD.  December’s was a very big miss for Canada at -44K jobs, so a positive number of any kind will likely re-ignite strong short-term interest in the Canadian dollar.  If we see the opposite, we’ll likely see the Loonie bears continue to push the trend lower in the currency that was sparked in October 2013.

See also:

Asian Session Recap

U.S. Session Recap

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