NFP Disappoints, 235k v/s 550k, USD Bid After Pullback

[MongiIG]

NFP TALKING POINTS:

• This morning’s NFP report disappointed on the headline number and in Average Hourly Earnings.
• On the positive side, the unemployment rate fell to 4.2%, below the Fed’s threshold for ‘maximum employment.’

This morning’s NFP report had little to be excited about with the headline figure printing at a paltry 235k v/s the expected 550k. Also disappointing was the Average Hourly Earnings portion of the report, which denotes inflation in the more important mechanism of wage growth.

On the positive side, the unemployment rank dropped to 4.2%, below the 4.5% expected and the 4.6% from last month. This is important as the Fed has been saying that they’re looking for ‘maximum employment’ before tilting policy in a more-hawkish direction. The Fed’s line-in-the-sand for maximum employment is 4.5% so, we’re there. The bank has previously said that they’d like to see multiple months of this before making any knee-jerk decisions, but this is something that will likely be noted at the December FOMC rate decision.

In response to the this morning’s NFP report, little was clear across markets. The US Dollar put in a quick drop but that was met with a bullish response. As of this writing, 45 minutes after the release, and the US Dollar is trading at a session high after recovering the entirety of the NFP-fueled sell-off.

As I had shared yesterday, the bullish theme in the US Dollar remains a major push point across FX markets, and this morning’s reaction to the NFP print has proven this to be correct again.

US DOLLAR ONE MINUTE PRICE CHART

Chart prepared by James Stanley; USD, DXY on Tradingview

 

Written by James Stanley, Senior Strategist for DailyFX.com

[CatherineLucy]

With the emergence of Omicron, there is no trace to be found, and global currencies are in a state of chaos.What do you guys think?

[MongiIG]

On 03/12/2021 at 18:46, CatherineLucy said:

With the emergence of Omicron, there is no trace to be found, and global currencies are in a state of chaos.What do you guys think?

Hi @CatherineLucy

OTTAWA, Nov 28 (Reuters) - Currency markets calmed on Monday in Asia after the initial shock of the discovery of the Omicron coronavirus variant sent investors scurrying for cover last week, but analysts warned of more volatility with little still known about the new strain.

[MongiIG]

On 03/12/2021 at 18:46, CatherineLucy said:

With the emergence of Omicron, there is no trace to be found, and global currencies are in a state of chaos.What do you guys think?

Foreign-exchange market volatility hovered near a nine-month peak on Thursday as traders weighed the risks posed by a more hawkish Federal Reserve amid ongoing uncertainty about the threat from Omicron.

Full article: CNBC

 

The dollar steadied on Wednesday and risk appetite recovered somewhat, but euro-dollar volatility remained elevated as investors weighed up hawkish comments from the Federal Reserve and risks relating to the Omicron variant.

Full article: CNBC