Article Highlights

  • U.S. Jan employment up by 151K vs. 189K expected
  • U.S. Dec NFP downgraded from 292K to 262K
  • U.S. jobless rate dipped from 5.0% to 4.9%
  • Canadian employment change at -5.7K vs. +5.2K expected in Dec
  • Canada’s unemployment rate rose from 7.1% to 7.2%
  • Canadian Ivey PMI jumped from 49.0 to 66.0 vs. 50.3 forecast
  • Chinese banks closed for the holiday
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Weak jobs data? So what?! The Greenback managed to score big gains against its forex rivals on Friday, despite a downbeat January NFP report.

Major Events:

U.S. employment report – I’m seeing red! The January NFP report came in weaker than expected with a meager 151K gain in hiring, much slower than the estimated 189K gain. To make things worse, the previous month’s report was downgraded to show a 262K increase in employment from the initially reported 292K figure.

On a more positive note, the unemployment rate dipped from 5.0% to a nine-year low of 4.9% even as labor force participation improved from 62.6% to 62.7%. In addition, average hourly earnings rose by 0.5% versus the projected 0.3% gain, suggesting that the labor market slack is being absorbed and that wage growth is present.

Canadian jobs and manufacturing data – In contrast, Canada’s jobs report wasn’t so upbeat, as the economy shed 5.7K jobs in January instead of showing the estimated 5.2K gain. Because of that, the unemployment rate rose from 7.1% to 7.2% with energy-rich Alberta reporting huge declines in full-time hiring.

Still, the Ivey PMI was able to surge from 49.0 back to the expansionary territory at 66.0, outpacing the projected improvement to 50.3 to indicate a much stronger pace of growth in the industry.

Major Currency Movers:

USD – The Greenback tossed and turned upon seeing the results of the NFP report before picking a strong bullish direction.

AUD/USD plummeted by more than a hundred pips to .7100, EUR/USD retreated to a low of 1.1119, USD/JPY bounced off the 116.50 minor psychological mark to a high of 116.98, and GBP/USD fell to a low of 1.4453.

Watch Out For:

  • 12:00 am GMT: Japanese average cash earnings (0.7% expected, 0.0% previous)
  • 12:30 am GMT: Australia ANZ job advertisements (leading indicator of jobs gains)

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