Dollar is trying to rebound after non-farm payroll report but struggles to find sustainable buying. Headline NFP showed 156k growth in December, below expectation of 178k. Nonetheless, prior month’s figure was revised up from 178k to 204k. Unemployment rate rose to 4.7% as expected. Wages showed strong growth with average hourly earnings increased 0.4% mom, above expectation of 0.3%. Also from US, trade deficit widened to USD -45.2b in November. On the other hand, Canadian dollar rises on job data which showed an impressive 53.7k growth in December. Unemployment rate in Canada also rose to 6.9%. Canada trade balance turned into CAD 0.5b surplus in November.
Eurozone confidence indicators came in generally better than expectations. Business climate indicator rose to 0.79 in December, up from 0.41, above consensus of 0.47. Economic confidence rose to 107.8, up from 106.6, above consensus of 106.8. Industrial confidence rose to 0.1, up from -1.1, above consensus of -0.4. Services confidence rose to 12.9, up from 12.2, above consensus of 12.0. Consumer confidence rose to -5.1, up from -6.2, above expectation of -5.3. Eurozone retail sales dropped -0.4% mom in November, in line with expectations. German factory orders dropped -2.5% mom in November, retail sales dropped -1.8% mom.
Elsewhere, Swiss foreign currency reserves dropped to CHF 645b in December. Australia trade balance turned into surplus of AUD 1.24b in November, first surplus since 2014. Japan labor cash earnings rose 0.2% yoy in November.
USD/JPY Mid-Day Outlook
Daily Pivots: (S1) 114.56; (P) 115.99; (R1) 116.77; More…
USD/JPY recovers ahead of 114.76 support but stays in range below 118.65. Intraday bias remains neutral first. Outlook stays bullish with 114.76 intact and further rise is expected. Above 118.65 will extend the whole rise from 98.97 to 125.85 key resistance next. However, sustained break of 114.76 will confirm short term topping and bring deeper pull back to 55 day EMA (now at 112.76) and possibly below.
In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. The impulsive structure of the rise from 98.97 suggests that the corrective is completed and larger up trend is resuming. Decisive break of 125.85 will confirm and target 61.8% projection of 75.56 to 125.85 from 98.97 at 130.04 and then 135.20 long term resistance.
Economic Indicators Update
|00:00||JPY||Labor Cash Earnings Y/Y Nov||0.20%||0.20%||0.10%|
|00:30||AUD||Trade Balance (AUD) Nov||1.24B||-0.55B||-1.54B||-1.12B|
|07:00||EUR||German Factory Orders M/M Nov||-2.50%||-2.50%||4.90%||5.00%|
|07:00||EUR||German Retail Sales M/M Nov||-1.80%||-0.90%||2.40%|
|08:00||CHF||Foreign Currency Reserves Dec||645B||649B||648B|
|10:00||EUR||Eurozone Business Climate Indicator Dec||0.79||0.47||0.42||0.41|
|10:00||EUR||Eurozone Economic Confidence Dec||107.8||106.8||106.5||106.6|
|10:00||EUR||Eurozone Industrial Confidence Dec||0.1||-0.4||-1.1|
|10:00||EUR||Eurozone Services Confidence Dec||12.9||12||12.1||12.2|
|10:00||EUR||Eurozone Consumer Confidence Dec F||-5.1||-5.3||-5.1||-6.2|
|10:00||EUR||Eurozone Retail Sales M/M Nov||-0.40%||-0.40%||1.10%||1.40%|
|13:30||CAD||Trade Balance (CAD) Nov||0.5B||-1.6B||-1.1B||-1.0B|
|13:30||CAD||Net Change in Employment Dec||53.7K||-5.0k||10.7k|
|13:30||CAD||Unemployment Rate Dec||6.90%||6.90%||6.80%|
|13:30||USD||Trade Balance Nov||-45.2B||-42.2B||-42.6B||-42.4B|
|13:30||USD||Change in Non-farm Payrolls Dec||156K||178k||178k||204K|
|13:30||USD||Unemployment Rate Dec||4.70%||4.70%||4.60%|
|13:30||USD||Average Hourly Earnings M/M Dec||0.40%||0.30%||-0.10%|
|15:00||USD||Factory Orders Nov||-2.30%||2.70%|