Asian Session – Calm market awaits US January employment report
February 7, 2014 7:50 am
It was a mostly quiet session in Asia, as traders looked forward to the release of the US employment report for January later in the day.
The euro was little changed against the US dollar, trading down a mere 0.02% at 1.3585. The euro rallied strongly following the inaction by the European Central Bank the previous day, topping the 1.36 level at some point. The ECB put off any new decisions until March, when it would also have fresh data and updates of its economic forecasts.
Against the yen, the euro consolidated the previous day’s gains by rising 0.04% to 138.81. The euro had hit a 2-month low against the yen previously in the week at 136.61.
The dollar also managed to gain against the yen as it rose 0.10% to 102.18. The dollar pulled further away from an 11-week low of 100.76 on the back of optimism that today’s jobs figures would be an improvement from the previous month’s disappointing 74 thousand new payrolls. Economists polled by Reuters were expecting a gain of 185 thousand payrolls.
The employment report was particularly important as a strong report would allay worries that the US economy was slowing down, following some mixed data recently. On the other hand, economic weakness could have been the result of some extreme weather conditions, also witnessed during January.
A positive performance on Wall Street during the previous day helped Asian markets – particularly the Nikkei which rose by more than 2% – to rebound strongly. It was the best day for US stocks in 1 ½ months, which in turn helped turn risk sentiment to positive. A lower-than-expected weekly number of new applications for jobless benefits, as well as positive earnings news, helped to create a positive atmosphere.
In Asian economic news, a PMI survey for China’s services sector dropped to 50.7 in January versus 50.9 the previous month, which was a 2 ½ year low. Japan’s coincident and leading economic indicators for December posted an increase compared to the previous month.
The pound also managed to consolidate above the 1.63 level against the dollar, rising 0.07% to end at 1.6332. The pound had initially dropped below 1.63 the previous day after the decision by the Bank of England to keep interest rates unchanged and not to issue an accompanying announcement. There were some interesting statistics expected out of the UK during the European session such as December’s industrial output and trade balance.
Finally the Australian dollar dipped slightly to 0.8949, down by 0.06% although the Reserve Bank of Australia raised its outlook for both inflation and economic growth in its quarterly monetary policy report. Economic growth would likely remain above 2.5% during the next 2 years, according to the RBA. Inflation would rise near to 3% by the middle of 2014, before easing back to 2.5%. The RBA targets inflation between 2% and 3%.
It was a mostly quiet session in Asia, as traders looked forward to the release of the US employment report for January later in the day.
The euro was little changed against the US dollar, trading down a mere 0.02% at 1.3585. The euro rallied strongly following the inaction by the European Central Bank the previous day, topping the 1.36 level at some point. The ECB put off any new decisions until March, when it would also have fresh data and updates of its economic forecasts.
Against the yen, the euro consolidated the previous day’s gains by rising 0.04% to 138.81. The euro had hit a 2-month low against the yen previously in the week at 136.61.
The dollar also managed to gain against the yen as it rose 0.10% to 102.18. The dollar pulled further away from an 11-week low of 100.76 on the back of optimism that today’s jobs figures would be an improvement from the previous month’s disappointing 74 thousand new payrolls. Economists polled by Reuters were expecting a gain of 185 thousand payrolls.
The employment report was particularly important as a strong report would allay worries that the US economy was slowing down, following some mixed data recently. On the other hand, economic weakness could have been the result of some extreme weather conditions, also witnessed during January.
A positive performance on Wall Street during the previous day helped Asian markets – particularly the Nikkei which rose by more than 2% – to rebound strongly. It was the best day for US stocks in 1 ½ months, which in turn helped turn risk sentiment to positive. A lower-than-expected weekly number of new applications for jobless benefits, as well as positive earnings news, helped to create a positive atmosphere.
In Asian economic news, a PMI survey for China’s services sector dropped to 50.7 in January versus 50.9 the previous month, which was a 2 ½ year low. Japan’s coincident and leading economic indicators for December posted an increase compared to the previous month.
The pound also managed to consolidate above the 1.63 level against the dollar, rising 0.07% to end at 1.6332. The pound had initially dropped below 1.63 the previous day after the decision by the Bank of England to keep interest rates unchanged and not to issue an accompanying announcement. There were some interesting statistics expected out of the UK during the European session such as December’s industrial output and trade balance.
Finally the Australian dollar dipped slightly to 0.8949, down by 0.06% although the Reserve Bank of Australia raised its outlook for both inflation and economic growth in its quarterly monetary policy report. Economic growth would likely remain above 2.5% during the next 2 years, according to the RBA. Inflation would rise near to 3% by the middle of 2014, before easing back to 2.5%. The RBA targets inflation between 2% and 3%.
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