The Australian Bureau of Statistic reported that Employment Change in January suffered a bigger loss in jobs, -12,200 compared to only its expectation for -4,700. On the bright side, the reading for December was revised higher, from 37,400 to 42,300. The Participation rate was steady at 64.7 percent. Unemployment rate ticked up to 6.4 percent, the highest level since August 2002. South Australia’s jobless rate of 7.3 percent led the employment weakness (other states with higher jobless rate include NSW, Queensland, and Victoria; unchanged in Tasmania).
German Trade Balance was much better at EUR21.8 billion in December, the latest figures from Destatis show. Meanwhile, Prelim Gross Domestic Product increased 0.7 percent during the fourth quarter of 2014, a considerable increase which is the second strongest increase in the last six quarters.
In the United States, Retail Sales’ headline and core reading were both weaker in January (-0.8 percent and -0.9 percent, respectively) despite the decline in gas prices to its lowest level since 2009. Meanwhile, the latest report from the Department of Labor showed that there was an increase in Americans who filed for unemployment claims last week. Jobless Claims was 304,000, that’s 22,000 higher than the median forecast.
Commodities
Near-term support at $1,200 held this week amid very narrow range trading that happened. The fact that price failed to reach $1,200 despite low volatility is a good indication of strength, so bulls must keep the pressure so they can push price back toward $1,300 in the short term.
Volatility remains but Oil did not reach a new high. Price stayed within the prior week’s range and the $50 support is holding so far. There is still a very long uphill climb before bulls can get confident of the situation. $50 to $60 would remain critical for both sides.
Currency Pairs
EURUSD is showing some signs that it might take a break from the weakness that’s been plaguing the pair since late 2014. Although minor, the three consecutive bullish weeks are an indication that price might attempt further advances in the near term. 1.16 remains as a critical area for now.
USDJPY reached a new weekly high but sellers right near the top greeted bulls on Thursday and Friday. The good news is that there is a relatively thick layer of support around 118 and more just below, and this could aid bulls in their quest for 120.
Again, GBPUSD did better than EURUSD this week as the former has made considerable upstrides in the last three weeks. Bulls must target a break of the 1.5650-1.5700 area in the next 5-15 days to keep the momentum on their side.
The Week Ahead
Monday will be light on news activity. The lineup includes New Zealand’s Retail Sales; UK Rightmove HPI; Japan’s Prelim GDP; Australia’s New Motor Vehicle Sales; and Eurogroup meetings. The US will observe Presidents’ Day today.
Tuesday will have Australia’s Monetary Policy Meeting Minutes; UK CPI, RPI, HPI, and PPI Output; Eurozone and German ZEW Economic Sentiment; ECOFIN meetings; Canada’s Foreign Securities Purchases; US Empire State Manufacturing Index, Mortgage Delinquencies, and NAHB Housing Market Index; and New Zealand’s GDT Price Index.
Wednesday will start with Japan’s Monetary Policy Statement and BOJ presscon; UK Average earnings Index, Claimant Count Change, Jobless Rate, and MPC Official Bank Rate and Asset Purchase Facility Votes; Canada’s Wholesale Sales; US Building Permits, PPI, Housing Starts, Capacity Utilization Rate, and FOMC Meeting Minutes.
Thursday will be quiet except for Japan’s Trade Balance; Switzerland’s Industrial Order Expectations; ECB Monetary Policy Meeting Accounts; US Jobless Claims and Philly Fed Manufacturing Index.
Finally, on Friday, activity will pick up a bit with Flash Manufacturing PMI and Flash Services PMI from France, Germany, and the Eurozone; UK Retail Sales and Public Sector Net Borrowing; Canada Retail Sales; and US Flash Manufacturing PMI.
