- Dollar drops against yen as stocks fall before U.S jobs data.
- USD/JPY falls to 118.85 after Nikkei hits 7 month low.
- EUR/JPY hits 4 month low at 132.57 after dovish ECB statement.
- EUR/USD plays in between 1.1116/1.1162, off Thursday' 2 week 1.1088 base.
- EUR/USD edges back up as stock market weakness, recovers to 1.1162 levels.
- GBP hits 3 month low on doubts over BOE rate hike timing.
- GBP/USD down to 1.5214 vs Thursday' 1.5219 low.
- DAX down 1.62%, 10108 low from 10216.
- Germany July Industrial orders -1/4% m/m vs previous 1.8%. -0.6% expected.
- Switzerland August CPI -0.2% m/m, -1.4% y/y vs previous -0.6%/-1.3%. -0.2%/-1.4% expected.
- Swedish Industrial Production drops sharply in July. -3.0% mm vs +0.3% forecast.
- IMF Japan mission chief- Recent moves in yen unlikely to be permanent.
- IMF says no BOJ easing needed in October if inflation expectations anchored.
- Japan Amari- Falls in China stocks don't reflect fundamentals.
- Turkish lira weakness to around record lows vs USD.
- (0830 ET/1230 GMT) US August non-farm payrolls, +220k eyed; last +215k.
- (0830 ET/1230 GMT) US August unemployment, 5.2% eyed; last 5.3%, participation 62.6%.
- (0830 ET/1230 GMT) US August average workweek, 34.5 hrs eyed; last 34.6 hrs.
- (0830 ET/1230 GMT) US August average earnings, +0.2% m/m eyed; last +0.2%.
- (0830 ET/1230 GMT) Canada's economy is expected to have lost 4,500 jobs in August, while the unemployment rate is seen holding steady at 6.8 percent.
- (0900 ET/1300 GMT) Brazil's national automakers' association releases auto sales data for August.
- (0900 ET/1300 GMT) Mexico's national statistics agency releases August data for consumer confidence index.
Key Events Ahead
- (0810 ET/1210 GMT) Federal Reserve Bank of Richmond President Jeffrey Lacker speaks on "The Case against Further Delay" before the Retail Merchants Association Economic Forecast Breakfast, in Richmond, Virginia.
FX Recap
EUR/USD is supported above 1.1100 levels and currently trading at 1.1138 levels. It has made intraday high at 1.1161 and low at 1.1114 levels. The pair was calm on Friday, during European trading hours, and was changing hands marginally higher at $1.1140, with higher volatility certain to come after the release. From the euro point of view, investors sold the single currency amid a dovish European Central Bank (ECB) presser, where bank President Mario Draghi announced the central bank had cut the inflation and GDP outlooks for the near future. Shortly before that, the ECB left all three main interest rates unchanged, meaning the deposit rate remained at -0.2%, the main refinancing rate stayed at 0.05% and the marginal lending facility was kept at 0.3%. Market participants are anxiously waiting for today's payrolls numbers and the rest of the labour market data. Job gains for August in the US are expected to remain near July's levels of 215,000, with the unemployment rate predicted to tick lower from 5.3% to 5.2%. Initial support is seen around at 1.1015 and resistance at 1.1363 levels.
USD/JPY is supported around 119.00 levels and posted a high of 120.18 levels. It has made intraday low at 118.83 and currently trading at 119.06 levels. The dollar dropped on Friday, weak stocks raised the demand for the safe-haven yen, with traders increasingly certain that a key U.S. jobs report is unlikely to push the Fed to hike rates. The dollar fell 0.7 pct to 119.25 yen, on track for a 2 pct loss this week. The euro was down 0.5 pct at 132.85 yen after hitting a 4-month low of 132.62. The Japanese yen made strong advances against the greenback as investors favoured less risky assets ahead of tonight's US non-farm payrolls report. Traders braced for the worst ahead of Friday's US employment figures, which have the power to extinguish any bets of the Federal Reserve (Fed) raising interest rates later this month, sending safe-haven assets including the yen higher on Friday. Initial resistance is seen at 123.20 and support is seen at 118.42 levels.
GBP/USD is supported above $1.5200 levels. It made an intraday high at 1.5259 and low at 1.5213 levels. Pair is currently trading at 1.5227 levels. The pair hovers around 1.5230; working hard to hit the positive territory amid the absence of fresh fundamental cues out of Europe. Sterling dropped against the dollar on Thursday after the British services sector grew at its weakest pace in more than two years in August. The services PMI fell to 55.6 from 57.4 in July, well below consensus forecasts of a 57.6 reading. Today was data free session for the UK. Market will eye on US NFP numbers for the further directions. Initial support is seen at 1.5185 and resistance is seen around 1.5436 levels.
NZDUSD is supported above 0.6300 levels and trading at 0.6367 levels and made intraday low at 0.6351 and high at 0.6398 levels. The Kiwi erased a part of early gains and remains under pressure ahead of US NFP numbers. While the other Antipodeans emerged the biggest loser, as markets give up riskier assets in search safer bets. The Kiwi was heavily sold in to the prevailing risk-off sentiment and now trades near lows at 0.6252 levels. Initial support is seen at 0.6195 and resistance at 0.6511 levels.
AUD/USD is supported below 0.7000 levels and trading at 0.6983 levels. It has made intraday high at 0.7021 levels and low at 0.6959 levels. The Australian dollar fell to its lowest in six-and-a-half years against the greenback on Friday, and some strategists say the currency has further to go before finding a new floor. On Friday afternoon in Sydney the AUD/USD pair traded 0.70% lower at $0.6968, down from $0.7017 where the cross closed in New York on Thursday and it's weakest since early 2009. RBA has held a neutral stance since May, when the bank last cut interest rates, this week's GDP data certainly builds a case for further easing. Retail data on Thursday also suggested consumer demand could do with a booster, with sales down 0.1% month-on-month in July, missing the 0.4% rise forecast by analysts. Initial support is seen at 0.6945 and resistance at 0.7122 levels.
Equities Recap
World shares inched lower towards their fourth weekly loss in the last five on Friday, as a boost from a supportive-sounding ECB gave way to caution ahead of closely watched U.S. jobs data.
Europe's index fell 0.6 pct to 1,420.52 points in early trading, Britain's FTSE 100 was down 0.9 pct, France's CAC 40 slipped 1 pct and Germany's DAX inched lower 1.1 pct. U.S. stock index futures extended losses, were down about 1 pct.
MSCI's broadest index of Asia-Pacific shares outside Japan chalked up its worst weekly losing streak since 2011 as it ended the latest one down more that 4 percent. Japan's Nikkei fell 2.5 percent on the day and 7 percent for the week as it slumped to a seven-month low.
Commodities Recap
Oil prices fell on Friday, pushing benchmark North Sea Brent crude down towards $50 a barrel, after a cut in European growth forecasts heightened worries over the outlook for demand at a time of huge oversupply. Brent crude for October was down 12 cents a barrel at $50.56 by 0935 GMT, after touching an intra-day low of $49.68. U.S. crude CLc1 was down 20 cents at $46.55 a barrel.
Gold held declines from a two-day losing streak on Friday, ahead of a crucial U.S. jobs report as traders waited for clues about the timing of a Federal Reserve rate hike. Spot gold was little changed at $1,124.96 an ounce by 0640 GMT, after losing over 1 percent in the last two sessions. The metal, which fell to a one-week low of $1,121.35 on Thursday, was on track for a second straight weekly decline.
Treasuries Recap
JGB prices ended the day higher, with the 5s/30s curve flattening by 2.5bp on the day. Yields on the current 5-yr, 20-yr, and 30-yr JGBs finished the afternoon session at their intraday lows, as Tokyo stocks remained sharply weaker in late afternoon trading. The Nikkei 225 index briefly lost as much as 572pts in mid-afternoon trading, though it opened the day higher by 130pts.
Benchmark 10-year UK gilt yields fell five basis points, or 0.05 percentage point, to 1.85 percent.
German 10-year yields were 3 basis points lower at 0.706 percent, their lowest level in nearly a week after falling as much as 6 bps on Thursday and reversing Monday's sharp rise. Yields on other euro zone bonds except for Greece were down 2-3 basis points.
New Zealand government bonds were unchanged with yields mostly flat along the curve. Australian government bond futures rose, with the 3-year bond contract up 2 ticks at 98.240. The 10-year contract added 3.5 ticks to 97.3200.
