Summary re NFP so far - we believe market looks to buy the dip USD and Equities with picture so muddied
US NFP 74k VERY WEAK
Expected at 197k vs 203k prev
Unemploymentr Rate MUCH BETTER @ 6.7% vs 7.0% expected
Most not working due to weather at 273,000 most since 1970's -
INTOUCHFX VIEW: We feel market looks to sell the rally.. such a confusing picture ... EURUSD looks a good sell at 1.3650.. market was in mood to buy USD ahead of it.. think they discount the headline .. write it off to weather.. and try get the dollars in cheap here
We think you buy the dip in equities and this backed up here... Market was looking to buy ahead of the data.. it's not great but the picture is so confusing we believe market will go back to what they know and how they felt before.. Will be sensitive to any comments from the Fed however, and we believe in particular that comments on extending forward guidance / lowering unemployment threshold could be crucial
Goldies saying its a very strange report.. with Hatzius looking at weaker side to earnings He feels weather accounts for 50k or so, but still a large gap to account for Upward revisions but not huge so hard to know what accounts for such a large affect
UBS on NFP Breakdown: Based on the weaker weather-related
payrolls data plus some household-survey data on not at work
because of weather, we would estimate the weather drag on Dec
payrolls to be about 45k. So still some underlying softening in
payrolls, but the temporary drag from weather was also
noticeable. That weather drag is of course likely to be
exacerbated by the cold patch in January.
Note: *More than a quarter million Americans were not at work
because of inclement weather, the most for any December since
1997*
USTs: Seems to be behind some of the give back in TYh here.