US indices are rallying again today after getting a big boost from a better than expected nonfarm payrolls report. Expectations had been low after the ADP disappointment and downward revisions. The nonfarm report builds on the case made by this week’s PMI and beige book report that some regions in the US did really well last month to overcome the impact of winter storm disruptions along the Eastern Seaboard. European indices have also moved up into positive territory on the news. Crude oil and gasoline are also rallying on the job numbers which suggest an improving outlook for resource demand as the US economy continues to accelerate. Natural gas, on the other hand is falling again as the end of heating season approaches. USD is strengthening against most majors as the strong jobs report suggests that tapering is likely to continue through this month’s Fed meeting at least. Defensive plays like gold and JPY have dropped off particularly sharply. AUD remains a top performer on anticipation of global economic growth despite attempts by RBA Governor Stevens to try and talk the Dollar down overnight. The hardest hit currency this morning has been CAD which has given back all of yesterday’s gains and more after Canadian jobs fell last month. Traders should note though that the main job losses were in part time positions and full time jobs did grow again last month. This, plus a better than expected Canadian trade balance suggest that the loonie could rebound at some point after the knee-jerk reaction to the headline number runs its course. Economic News Economic reports released overnight and this morning include: US nonfarm payrolls 175K vs street 150K vs previous 113K US private payrolls 162K vs street 145K US unemployment rate 6.7% vs street 6.6% Canada employment change (7K) vs street 15K vs previous 29K Canada unemployment rate 7.0% as expected Canada full-time jobs 18K vs previous 50K Canada part-time jobs (25K) vs previous (21K) US trade balance ($39.1B) vs street ($38.5B) Canada trade balance ($0.2B) vs street ($1.2B) Australia construction PMI 44.2 vs previous 48.2 Japan leading indicator 112.2 vs street 112.4 Bank of England inflation forecast 2.8% vs previous 3.6% Germany industrial production 5.0% vs street 3.9% Economic reports due later today include: TBA Sat China trade balance street $14.5B 12:30 pm AEDT Sun China consumer prices street 2.1% vs previous 2.5% 12:30 pm AEDT Sun China producer prices street (1.9%) 11:50 am AEDT Mon Japan GDP annualized street 0.9% TBA Mon China new yuan loans street 721B

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