Article Highlights

  • U.S. Oct non-farm payrolls up by 271K vs. 179K forecast, 137K previous
  • U.S. Oct unemployment rate down from 5.1% to 5.0% as expected
  • U.S. average hourly earnings increased by 0.4% vs. 0.2% forecast
  • Canadian Oct employment rose by 44.4K vs. 9.5K forecast, 12.1K previous
  • Canada’s Oct unemployment rate dropped from 7.1% to 7.0% as expected
  • Canadian Sept building permits down by 6.7% vs. projected 1.4% gain
  • Chinese trade surplus widened from 60.3B to 61.6B USD
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Dollar domination was the name of the game during Friday’s U.S. forex trading session, thanks to stronger Fed liftoff speculations spurred by an upbeat NFP release.

Major Events:

U.S. NFP release – It’s all green, fellas! The U.S. economy added 271K jobs in October, much higher than the projected 179K increase and the previous month’s 137K gain, which was downgraded slightly from the initially reported 142K figure. The jobless rate fell from 5.1% to 5.0% while average hourly earnings picked up by 0.4%, twice as much as the projected 0.2% uptick.

Now I remember the Fed saying a little something about wanting to see more signs of progress in the labor market before giving the go signal for hiking rates this year. Here’s what the upbeat NFP could mean for Fed policy and U.S. dollar forex trends.

Canadian jobs data – Uncle Sam’s North American neighbor Canada also printed its latest jobs figures and saw stronger than expected headline figures, but the underlying components failed to impress. As it turns out, most of the gains were from temporary hiring during the election season, with part-time positions accounting for a bulk of the 44.4K employment gains in October. Hiring in the natural resources sector continued its losing streak, shedding 8K jobs then.

Chinese trade balance – Over the weekend, China printed a larger trade surplus of 61.6 billion USD compared to the previous 60.3 billion USD figure. However, a closer look at the underlying data reveals that exports slumped by 6.9%, chalking up its fourth consecutive monthly decline, while imports fell by 18.8% to reflect a drop in demand. Yikes!

Major Currency Movers:

USD – The Greenback got a double dose of bullish energy from impressive NFP data, which strengthened December rate hike expectations and brought risk aversion back to the table. U.S. equities retreated on Friday, as potentially higher borrowing costs could weigh on consumer spending and business investment down the line.

USD/JPY surged from the 121.80 area to a high of 123.30, EUR/USD tumbled to new lows just above the 1.0700 handle, GBP/USD broke below the 1.5100 major psychological mark to a low of 1.5022, and USD/CHF popped up to the 1.0050 area.

JPY – Yen forex pairs also enjoyed more volatility during the session, driven mostly by risk-off flows. Higher-yielding currencies bowed to the lower-yielding Japanese currency just after the U.S. jobs figures were printed but eventually recouped some of its losses before the closing bell tolled.

NZD/JPY slipped from an intraday high of 80.76 to a low of 79.92 before recovering to 80.50, AUD/JPY dropped from the 87.30 area to a low of 86.49 then closed at 86.66, and EUR/JPY let go of the 132.50 handle then dipped to 131.45 before ending at 132.28.

Watch Out For:

  • ANZ job advertisements at 1:30 am GMT (3.9% previous)
  • Japanese average cash earnings data at 2:30 am GMT (0.5% expected, 0.4% previous)

See more:

Asian Session Recap

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!