The big battle between bulls and bears playing out this week over whether the big selloff is done for now or if we could see another downleg continued unabated today with WTI and Brent posting 5-6% gains reversing similar losses from Wednesday. Overall, crude oil appears to have levelled off in a range between $44.00 for both up to about $55.00 for WTI and $60.00 for Brent, but I would hardly call it stable at this point. Rather, the big intraday swings continue to create opportunities for short-term trading. Oil sensitive currencies like CAD and NOK have been climbing today and may continue to bounce around in tandem with energy commodity prices. Natural gas has also been active today falling to a new 52-week low near $2.60 after a smaller than expected storage drawdown reminded traders that there is only a few weeks left in this year’s home heating season. Oil trading may remain active right through to the end of the week with the US weekly drilling rig count (the data point that sparked the recent back and forth gyrations) due in the early afternoon tomorrow. First up tomorrow, however, is the main scheduled economic event of the week, US nonfarm payrolls and the Canadian labour force survey. The big question on both sides of the border this month is how much of an impact has the oil price crash and layoffs in the oil sector had on overall job numbers. The issue is that historically the negative impact on jobs from oil price crashes has hit sooner than the benefits to employment in other sector from lower energy costs. Looking back to the last supply war driven oil crash a generation ago shows US nonfarm payrolls Nov 1985 209K Dec 1985 167K Jan 1986 125K Feb 1986 107K Mar 1986 94K Jun 1986 (94K) Jul 1986 318K Sep 1986 347K Dec 1986 205K Source: Bloomberg L.P. On the other hand, there was only a brief increase in US jobless claims back above 300K for a couple of weeks and they have been dropping the last two weeks. US ADP payrolls of 213K were 10K below street but offset by an upward revision to the previous month. Based on this, I think we’ll see US nonfarm payrolls of about 210K, toward the lower end of the 200K-250K sweet spot. Below 200K would indicate a slowing economy and push out interest rate hike expectations, while a report above 250K would suggest the Fed could move up its timetable from the mid-year currently expected. Also, keep an eye on US average hourly earnings which are expected to show an uptick but I have a hard time believing that considering how many high-paying oilpatch jobs have disappeared lately. For Canada, I think the oil crash will hit harder, particularly out west, and suspect we could see a loss of (15K) jobs, below the 5K increase the street has been expecting. Big high profile layoffs enacted or on the way at companies like Target and Tim Hortons could also drag on Canadian employment for the next several months. Today’s trading has mainly been about positioning ahead of the North American employment reports. US indices have been climbing while European indices finished on either side of flat after the ECB and Germany continued to play hardball with Greece over debt negotiations, which may continue to impact trading on that side of the Atlantic for a while to come. GBP had a nice breakout today after the Bank of England decided not to join the monetary easing parade and held interest rates steady, a stance that looks likely to continue through the May UK election. It’s fairly quiet today for Asia Pacific news, but AUD and NZD have been trading higher through the US session. We may see traders continue to digest the PBOC’s surprise stimulus move from earlier in the week and position ahead of the monthly China data that is due over the weekend and into next week. In aftermarket trading Pandora has been getting hammered as sales fell short of expectations, while Twitter is climbing on its positive report with traders shrugging off soft subscriber growth momentum so far.