Today’s employment for the US and Canada were mixed, leaving traders stuck figuring out what to do next. We have had a split decision so far this week of two big down days followed by two big up days and traders were looking to the job news to decide the score. US nonfarm payrolls appeared positive at first glance with the headline number beating the street and an upward revision to last month. Average hourly earnings grew at a much slower pace than expected and the participation rate continued to fall, however. Between that and the headline number still below 250K, speculation of an early interest rate hike (before June) appears to be easing. At the same time the headline number was still strong enough to keep speculation of a later first rate increase on the sidelines. On my suggestions from last night’s commentary, I was pretty much spot on the upward revision I called for 20K and it was 22K, but came in short on the headline number. The mixed US payrolls data stopped US stocks and USD in their tracks and knocked them back slightly. It appears we may see now a day of consolidation where US markets reflect on the moves made so far this year and try to figure out where things could be heading from here. The Canada job report was also mixed. Jobs fell by 5K last month which was well short of street expectations but close to the 10K drop I had suggested. A huge shift from part-time to full time positions in a month when normally there is high demand for seasonal stall strikes me as odd and makes me wonder if there could be a revision at some point. The street appears to have taken the report as a negative overall with CAD retreating on the announcement. Adding to the mix this morning has been talk out of Europe that the ECB may be looking at a €500 billion QE asset purchase program. This looks like less than the street has been expecting considering the fall in the EUR lately and the ECB would still need to do more to hit its 2-year balance sheet target, which had about €850 billion to go at the end of December. European indices have been trading lower on these reports and crude oil has also started to retreat again with Brent testing the key $50.00 level once again. Corporate News There are no major corporate announcements today. Economic News Economic reports released overnight and this morning include: US nonfarm payrolls 252K vs street 240K previous revised up to 353K from 321K US private payrolls 240K vs street 230K US manufacturing payrolls 17K vs street 15K and previous 29K US unemployment rate 5.6% vs street 5.7% US average hourly earnings 1.7% vs street 2.2% US participation rate 62.7% vs previous 62.9% Canada employment change (5K) vs street 15K vs previous (10K) Canada full time jobs 53K vs previous 5K Canada part-time jobs 57K vs previous (16K) Canada unemployment rate 6.6% as expected Canada housing starts 180K vs street 192K China consumer prices 1.5% as expected China producer prices (3.3%) vs street (3.1%) UK trade balance (£1.4B) vs street (£2.0B) UK industrial production 1.1% vs street 1.6% UK manufacturing production 2.7% vs street 2.3% UK construction output 3.6% vs street 6.7% Greece industrial production 2.3% vs previous (0.7%) Germany industrial production (0.5%) vs street (0.6%) France industrial production (2.6%) vs street (1.9%) Spain industrial output 0.0% vs street 0.6% Sweden industrial production (5.0%) vs street (3.6%) Norway consumer prices 2.1% as expected Norway producer prices (7.9%) vs street (6.6%) Norway retail sales 0.2% vs street 0.3% Australia construction PMI 44.4 vs previous 45.4 Australia retail sales 0.1% vs street 0.2% Economic reports due later today include: There are no major reports or speeches later today.
Job reports muddy the waters
19:00, 08 January 2015