Market Brief
Eurozone Unemployment in Aug was 9.6%; exactly on consensus estimates and modestly higher than the month prior (9.5%). National PMI figures across Europe were slightly better than expected (Eurozone composite PMI 49.3 vs. 49.0 exp.) but the EUR failed to benefit from the news, as markets were instead focussed on comments from EU’s Almunia; that the Eurozone’s finance ministers were to discuss EUR strength ahead of the forthcoming G7.
Meanwhile, Norwegian Data was the starlet of the morning session as the Unemployment Rate for Sep dropped to 2.7% (2.9% exp, 3.0% prior), further confirmation of the superior state of the Norwegian economy versus its major peers. EURNOK touched its lowest levels in 11 months (8.4179), but profit-taking on the last 2 days’ moves eroded gains, and later the drop in oil and energy prices dragged on all commodity currencies. The slump was prompted by inventory data that showed natural gas stockpiles have now reached all-time highs; resulting in front contract down over 7.5% on the day.
During the afternoon, jobs data were mixed; with initial claims topping estimates at 551K (535K consensus), but continuing claims shrinking to 6090K (6170K expected, 6138K previous). It was also notable that the improvement in Personal Spending in Aug was the biggest since October 2001, nevertheless, US equities traded very heavy from the open and the poor performance was exacerbated after the long-awaited ISM report came out at 52.6 (54.0 expected, 52.9 prior).
Late in the evening, troubled CIT Group Inc (one of the US’s largest lenders to small and mid-size businesses) said it would seek to restructure its debt, but added it may file for bankruptcy protection. This sent Treasury yields plummeting, and ensured Asian equity markets traded much lower; the Nikkei closed down around 2.5% despite better than expected jobless rate and household spending numbers in Japan. Although today’s Non Farm Payrolls have long been billed as the main risk event of the week, the potential collapse of CIT will no doubt weigh on markets, and if realised, would be devastating for an economy still shedding over 100,000 jobs a month. Corporate earnings season begins next week and markets will be watching the headlines for direction of risk appetite from here. However, with the standard set so high last quarter, there remains significant risk of disappointment.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 9'731.87 | -2.47 |
| Hang Seng Index | 20'469.29 | -2.32 |
| Shanghai Index | 2'779.43 | 0.9 |
| FTSE 100 Index | 5'047.81 | -1.68 |
| DAX Index | 5'554.55 | -2.13 |
| SMI Index | 6'255.17 | -1.08 |
| S&P future | 1'024.60 | -0.27 |
| World Markets | Current Level | % Change |
| Gold | 1'000.40 | 0.12 |
| Silver | 16.35 | -0.03 |
| VIX | 28.27 | 10.39 |
| Crude wti | 70.18 | -0.9 |
| USD Index | 77.11 | -0.1 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Norway PMI SA, Sep | 47 | 42.3 | NOK/07:00 |
| UK: Construction PMI, index Sep | 48.1 | 47.7 | GBP/08:28 |
| UK: BoE housing equity withdrawal, £ bn Q2 | - | -8.1 | GBP/08:30 |
| E16 : PPI, % m/m (y/y) Aug | 0.4 (-7.5) | -0.8(-8.5) | EUR/09:00 |
| US: Change in nonfarm payrolls, thous Sep | -189 | -216 | USD/12:30 |
| US: Unemployment rate, % Sep | 9.8 | 9.7 | USD/12:30 |
| US: Avg hourly earnings, % m/m (y/y) Sep | 0.2 (2.6) | 0.3 (2.6) | USD/12:30 |
| US: Average weekly hours Sep | 33.1 | 33.1 | USD/12:30 |
| US: Factory orders, % m/m Aug | 1.1(-18.9) | 1.3(-23.2) | USD/14:00 |
Currency Tech
AUDUSD
R 1: 0.8860
CURRENT: 0.8705
S 1: 0.8675
S 2: 0.8585
USDCAD
R 2: 1.1100
R 1: 1.0990
CURRENT: 1.0840
S 1: 1.0660
S 2: 1.0590
EURJPY
R 2: 133.85
R 1: 132.10
CURRENT: 130.30
S 1: 129.60
S 2: 129.35
USDMXN
R 2: 13.845
R 1: 13.791
CURRENT: 13.765
S 1: 13.620
S 2: 13.454
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
