MORNING BRIEFING: Forex Market flat, as investors await US jobs report

What’s new:
Forex: High-yielding currencies firm as markets await US jobs report
Global Markets: Global stocks hit 2-week high
China: FX reserves are 65 percent in US dollars
Euro zone: ECB leave rates on hold at 1 percent as expected
United States: White House Economic Advisor Summers to visit China September 4th
United States: Pending home sales rise unexpectedly in July; Jobless claims fell for second straight week
United States: US jobs report today at 1430 CET

Today:


Asian Rates & Indices:
EURUSD: 1.2835 - 1.2811.
USDCHF: 1.0156 - 1.0121.
GBPUSD: 1.5429 - 1.5389.
EURJPY: 108.29 – 107.92.
USDJPY: 84.42 – 84.17.
DowJones: 10'320.10 +0.49%
NASDAQ: 2'200.01 +1.06%
S & P 500: 1'090.10 +0.91%
Nikkei: 9’114.13 +0.57%
Shanghai: 2'657.15 +0.05%
Gold: $ 1'253.30
Crude Oil: $ 74.68

Comments:

World stocks hit a two-week high yesterday as optimism from strong US and Chinese manufacturing data stretched into a second day while the euro gained, drawing support from solid French and Spanish bond auctions. Asian stocks inched higher on Friday but gains were limited ahead of all-important US jobs data.

Also on Friday, the euro and high-yielding currencies held firm following an improvement in US pending home sales and jobless claims data yesterday, which bolstered investor appetite for risk ahead of the highly anticipated  US jobs data due today at 1430 CET.

However, worries about a slowdown in the US and global economies are keeping the yen well locked near a 15-year high against the dollar and the Swiss franc hovering near a record peak against the euro.
 
Economists are expecting a decline of 100’000 jobs in August, while an increase of 41’000 jobs is expected in the private sector. Better than expected figures would undoubtedly boost investor risk appetite, but may however lessen expectations for further easing by the FED which could also boost US bond yields, thus lifting the dollar.

China meanwhile offered a glimpse of its foreign currency reserves, confirming they are heavily allocated in dollars. A report in the China Securities Journal, citing unnamed reserve managers, confirmed that Chinese reserves are held roughly in line with the global average, which is 65 percent in dollars, 26 percent in euros, 5 percent in sterling and 3 percent in yen.

The White House said on Thursday that President Barack Obama's top economic adviser Larry Summers will visit China from Saturday for three days of meetings.

Good Weekend,

Emman Xuereb
Trading Desk
RTFX Ltd
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