Market Roundup
• Computer-driven funds likely winners from sterling flash crash.
• US nonfarm payrolls miss expectations: +156k vs forecast 175k.
• Revisions on balance negative but jobless rate and participation up.
• Average hourly earnings +0.2% as forecast.
• Fed's Mester says US payrolls a "solid number".
• Canada jobs surge by 67,200 in Sept vs forecast 10k, heavily weighted to part-time.
• Brazil IPCA inflation 8.48% y/y vs forecast 8.6%, 8.97% previously.
• Brazil's central bank chief Goldfajn says CPI down, but doubts linger.
• Mexico inflation 2.97% y/y vs 2.91% forecast 2.73% previously.
• Canada's Ivey purchasing index jumps in September to 58.4 from 52.3.
Looking Ahead - Economic Data (GMT)
• 01:45 China Caixin Services PMI Sep 52.1 -previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is supported at 1.1154 levels and currently trading at 1.1199 levels. The pair has made session high at 1.1206 and hit lows at 1.1144 levels. The dollar eased against the low-yielding euro on Friday after data showed that U.S. employment growth unexpectedly slowed in September but was stronger in August than initially reported, and traders kept bets that the Federal Reserve is likely to raise rates in December. The Labor Department said U.S. employment growth unexpectedly slowed for a third month in September and the jobless rate rose. Nonfarm payrolls rose by 156,000 jobs in September, missing economists' expectations of 175,000. Job gains for August were revised up to 167,000 from an initially reported 151,000. The dollar index was last down 0.1 percent at 96.682. It rose to a more than two-month high shortly before the release of the payrolls report. The greenback fell hard against the yen, losing as much as 1 percent after the jobs data. It was last down 0.7 percent at 103.17 yen. The euro rose 0.2 percent to $1.1199 but fell 0.7 percent to 115.22 yen.
GBP/USD is supported in the range of 1.2340 levels and currently trading at 1.2439 levels. It reached session high at 1.2469 and dropped to session low at 1.2348 levels. Sterling weakened again against US dollar in the US session after rebounding from a stunning plunge that injected volatility across markets. Sterling plummeted nearly 10 percent to a 31-year low in earlier trading in what traders called a "flash crash”. Even before a sudden plunge that briefly shaved off a tenth of the pound's value during Asian trading, sterling was headed for its worst week since January 2009 as some national leaders called for Britain to make a "hard" exit from the European Union in which it would leave the single market. The Bank of England was investigating the cause of the sudden price move, but the currency had already been on track for one of its worst weeks in seven years as some national leaders called for Britain to make a "hard" exit from the European Union. Sterling retraced to $1.2440 in U.S. trading, which was still down 1.3 percent on the day.
USD/CAD is likely to find support at 1.3180 levels and is trading at 1.3289 levels. It has made intraday high at 1.3312 and lows at 1.3184 levels. The Canadian dollar declined to hit six-month low against its U.S. counterpart on Friday as volatility in the foreign exchange market and lower oil prices offset stronger-than-expected domestic jobs data. Data showed Canada's economy created 67,200 jobs in September, far more than expected, though that was fueled by the biggest increase in self-employed workers in more than seven years. U.S. employment growth unexpectedly slowed for the third straight month in September, which could make the Federal Reserve more cautious about raising interest rates. Oil fell about 1 percent on Friday as players took profits on a rally over the past week that propelled prices nearly 15 percent to four-month highs on hopes of OPEC crude output cuts. The Canadian dollar was last trading at C$1.3289 to the greenback weaker than Thursday's close of C$1.3207, or 75.72 U.S. cents.
AUD/USD is supported around 0.7500 levels and currently trading at 0.7588 levels. It hit session high at 0.7623 and made session lows at 0.7553 levels. The Australian dollar initially inched higher against US dollar on Friday after data showed U.S. employment growth eased for the third straight month in September but reversed course as slowdown was not expected to prevent the Federal Reserve from raising interest rates later this year. The Australian dollar edged 0.1 percent lower to $0.7576, near two-week lows as the greenback gained on expectations of a Federal Reserve rate hike this year. Domestic data this week showed a rosy picture of Australia's economy, boosting expectations for gross domestic product growth of more than 3 percent for the year. However, a resilient Aussie, up about 4 percent this year, could spoil the party. It fell nearly 11 percent in 2015 and more than 8 percent the year before.
Equities Recap
Continental European stock markets fell on Friday, with vouchers company Edenred and airline easyJet among the worst performers, although a new slump in sterling propped up Britain's FTSE 100.
UK's benchmark FTSE 100 closed up by 0.8 percent, the pan-European FTSEurofirst 300 ended the day down by 0.09 percent,
Germany's Dax ended down by 0.7 percent, France’s CAC finished the day down by 0.6 percent.
U.S. stocks ended down slightly on Friday as a drop in the British pound injected volatility to markets, while a weaker-than-expected jobs report was not enough to derail expectations for a Federal Reserve rate hike before the end of the year.
Dow Jones closed down by 1.17 percent, S&P 500 ended down by 0.33 percent, Nasdaq finished the day down by 0.28 percent.
Treasuries Recap
U.S. Treasuries ended little changed on Friday after data showed that U.S. employment growth unexpectedly slowed in September but was stronger in August than initially reported, and traders kept bets that the Federal Reserve is likely to raise rates in December.
Benchmark 10-year notes rose 2/32 in price to yield 1.74 percent. Earlier the yield rose as high as 1.77 percent, the highest since June 3.
Commodities Recap
Oil fell about 1 percent on Friday as players took profits on a rally over the past week that propelled prices nearly 15 percent to four-month highs on hopes of OPEC crude output cuts.
Brent crude settled down 58 cents, or 1.1 percent, at $51.93 a barrel. Earlier in the day, it hit $52.84 cents, three cents short of a one-year high.
U.S. West Texas Intermediate (WTI) crude settled down 63 cents, or 1.3 percent, at $49.81.
Gold fell for the ninth straight session on Friday, briefly tapping a four-month low as computer-generated selling offset support from weak U.S. payrolls data, but bullion was on track for its biggest weekly drop in more than three years.
Spot gold was down 0.09 percent at $1,252.71 an ounce by 3:11 p.m. EDT (1911 GMT), after falling 1 percent to $1,241.20, the lowest since June 8. It was on track to close the week down 4.8 percent, its biggest drop since June 2013. U.S. gold futures for December delivery settled down 0.1 percent at $1,251.90.
