MORNING BRIEFING: Strong jobs data, Euro zone debt lift US Dollar

What’s new:
Forex: Dollar rebound continues as Euro zone debt jitters re-emerge
Global Markets: Commodities and equity markets get lift from surprisingly strong US jobs data
China: Vice Finance Minister Guangyao says QE2 a shock to global financial markets
Euro-zone: Debt worries resurface
United States: Strong US job data, Non-farm Payrolls at 151K versus an expected 60K
United States: Treasury Secretary Geithner reaffirms his support for a strong dollar
United States: Geithner says US will never use its currency to gain advantage

Today:


Asian Rates & Indices:
EURUSD: 1.4085 - 1.3919
USDCHF: 0.9675 – 0.9601
GBPUSD: 1.6214 - 1.6104
EURJPY: 114.29 – 113.03
USDJPY: 81.44 – 81.14
DowJones: 11'444.08 +0.08%
NASDAQ: 2'578.98 +0.06%
S & P 500: 1'225.85 +0.39%
Nikkei: 9‘732.92 +1.11%
Shanghai: 3’159.51 +0.96%
Gold: $ 1'389.70
Crude Oil: $ 86.91

Comments:
    
A surprisingly better than expected US payrolls report along with renewed concerns about Ireland weighed on the euro and kept the greenback supported in Asia. On Friday, non-farm payrolls reading rose by 151k versus an expected 60k, and private payrolls expanded by 159k against consensus of 80k. The dollar is up more than 0.60 percent versus the euro, which was at 1.3919 earlier in Asia, as the euro triggered a succession of sell orders as it dropped.

On Friday, the 10-year Irish bond yield spread over benchmark German debt hit record highs, weighing on the single currency. Many traders say debt problems in some euro zone countries have resurfaced on their radar as the markets look for new trading factors after the Fed’s quantitive easing last week. The euro was sold heavily earlier this year as Greece struggled to finance its rising debt.

In a rare reference to the dollar, Fed Chairman Bernanke said that “we're certainly aware that the dollar does play a special role in the global economy”, and that “the best fundamentals for the dollar” will occur when the US economy is growing strongly.

Meanwhile, Treasury Secretary Geithner, in bilateral talks with Indian Finance Minister Mukherjee, reaffirmed his support for a strong dollar saying it is in the interests of the US, and also said the US will never use its currency to gain a competitive advantage. He said the flow of capital into emerging markets is fundamentally positive as it shows confidence in their growth prospects.

Chinese vice Finance Minister Guangyao, speaking to reporters ahead of this week’s G20 and APEC meetings said that the US’ latest move of quantitive easing is a shock to global financial markets. He added that China is planning “frank discussions” over its latest bout of printing money.

Good Day,

Emman Xuereb
Trading Desk
RTFX Ltd
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