Trade Desk Thoughts - Unemployment Claims

Unemployment Claims (Weekly) Actual 461k, Expected 469k, Previous 477k (Revised from 478k)

Release Explanation: This report provides the number of people claiming new unemployment benefits and the number of people who are continuing to claim unemployment benefits. Both metrics are provided in weekly and in 4-week moving average form. Very important that economic forecasts are based on the labor market. Economic strength builds from the willingness/confidence of firms to hire, without a strong labor market growth is hard to achieve. Over time the Employment Data will affect all economic releases, it does however take time for labor trends to form. A currency will strengthen or weaken in-line with the other releases that the Employment Data impacts, rather than as a knee-jerk reaction to these numbers printing. Economists tend to look more at the 4-week numbers because weekly numbers can be volatile although the market reacts to the headline numbers initially.

Trade Desk Thoughts: In the week ending October 11 there were 461k new claims for unemployment benefits, a decrease of 16k from last week's revised figure of 477,000. DOL estimated that Hurricane Ike added approximately 12,000 claims to the total. The 4-week moving average of new claims was 483,250, an increase of 750 from last week's unrevised average of 482,500.

The insured unemployment rate rose to 2.8% from last week's 2.7%.

There were 3,711,000 people continuing to claims benefits, an increase of 40,000 from last week. The 4-week moving average was 3,632,000, an increase of 65,750 from last week.

Forex Technical Reaction: S&P futures were recently trading 2.5% higher, near the highs of the session. In a sign the market was buying risk EUR/USD, GBP/USD and USD/JPY rose, but were recently holding steady.

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