Morning Commentary: Homer Dome!

Foreign Exchange - Morning Commentary
Homer Dome!
Share this story:
Facebook
Twitter
LinkedIn
Email
Alan Rose
Alan Rose
Foreign Exchange Senior Trader
The U.S. NFP jobs report was a home run today and comes against an overall backdrop of weaker global growth and a slowing U.S. economy. The U.S. created 266,000 jobs in November with the expectations of a gain of 180,000; this was a surprise to almost everyone in that it followed a very weak ADP private sector report on Wednesday. In addition to the outsized jobs gain, there were revisions to the two previous months adding another 41,000 jobs and the UR dropped again to a multi-decade low of 3.5% last seen in 1969.

The 266,000 jobs gain was the strongest report since January and comes as a surprise as the downstream effects of the trade war and a global slowdown have been impacting our economy. Manufacturing jobs rose sharply by 54,000 reflecting workers returning from the GM strike; average hourly earnings came in below expectations rising by 0.2% but the YoY rate rose from 3.0% to 3.1%. The labor force participation rate was a tick weaker from October coming in at 63.2%. All in all, a very strong report.

U.S. interest rates have jumped higher with 2-year and 10-year yields up by near 4 bps. The stronger than expected jobs report has propelled European stocks to the highs for the session and U.S. stocks are opening higher by near 0.80%. The U.S. dollar (DXY) is modestly stronger after falling for the previous five sessions. Overall, a very strong report but it is unlikely to move the needle for the Fed as job growth has been declining all year long and inflation remains benign; the FOMC meets next week and is widely expected to keep rates unchanged.
HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT:
  • The outsized U.S. gain in job creation had no positive ripple effect for Canada. Canada’s job market unexpectedly weakened for a second-straight month posting the biggest drop in employment since 2009. The economy lost 71,000 jobs; expectations were for a small gain of 10,000. Both full-time and part-time jobs had near equal losses for the month. The UR jumped from 5.5% to 5.9% which is also the biggest one-month gain since 2009. Canadian interest rates are down on the session and the Canadian dollar has reversed near 60% of its gains from this week.
If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133.
Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos!
Follow City National Bank on social media:
Facebook Twitter LinkedIn Google Plus YouTube
Non-deposit investment products:
Are not FDIC insured,
Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and
Are subject to investment risks, including possible loss of the principal invested.
This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting.
Unsubscribe from this list  |  Update email preferences
This message has been sent to bank@banking.offers.report. Please do not reply to this email. To ensure the delivery of future emails, please add foreignexchange@emails.cnb.com to your email address book or safe sender list.
Copyright ©2019 City National Bank – All Rights Reserved.
350 South Grand Avenue, 12th Floor, Los Angeles, CA 90071
City National Bank is a subsidiary of Royal Bank of Canada.
TERMS & CONDITIONS  |  PRIVACY STATEMENT
Equal Housing Lender
NMLSR ID# 536994 | City National Bank Member FDIC
                                                           

Comments

Popular posts from this blog