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Jobs Data Will Dampen Talk of US Recession, but does Dollar No Favors

February 01, 2013
The January nonfarm payrolls 157k increase was in line with expectations, but the back month revisions were worth another 127k and average hourly earnings rose 0.2% a bit more than expected.  The risk in the unemployment rate to 7.9% from 7.8% reflects two things--the participation rate and the incorporation of new census data.

The revisions mea…
Jobs Data Will Dampen Talk of US Recession, but does Dollar No Favors Jobs Data Will Dampen Talk of US Recession, but does Dollar No Favors Reviewed by Marc Chandler on February 01, 2013 Rating: 5
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Great Graphic: Must See- Euro Head and Shoulders Higher

February 01, 2013
This Great Graphic, made on Bloomberg, shows a very positive technical development that has taken place on the week bar charts.  We mention this possibility in our weekly technical note (here), but given this recent price action, it was worth showing it graphically.  
What you are looking at here is a possible head and shoulders bottoming pattern…
Great Graphic: Must See- Euro Head and Shoulders Higher Great Graphic:  Must See- Euro Head and Shoulders Higher Reviewed by Marc Chandler on February 01, 2013 Rating: 5
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Drivers Tighten Grip

February 01, 2013
The latest developments are serving to strengthen existing forces driving the foreign exchange market and producing a clear divergence of performances against the US dollar.  
The firmness in the US 10-year yield near 2%, the lack of much push back from G7 officials about the yen's weakness,a nd soft Japanese economic data (unexpected rise in …
Drivers Tighten Grip Drivers Tighten Grip Reviewed by Marc Chandler on February 01, 2013 Rating: 5
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Great Graphic: 2-Year Rate Differential and Euro

January 31, 2013
We constructed this Great Graphic on Bloomberg.  It shows the collapse of the premium the US offered over Germany on two-year government obligations.  It also shows how shifting interest rates weighed on the dollar against the euro. 

More broadly, it shows how the dollar's exchange rate against the euro tracks the 2-year interest rate differ…
Great Graphic: 2-Year Rate Differential and Euro Great Graphic:  2-Year Rate Differential and Euro Reviewed by Marc Chandler on January 31, 2013 Rating: 5
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Quiet into Month End

January 31, 2013
A fragile calm hangs over the foreign exchange market. as the month winds down.   There have been some sizable moves in the underlying asset markets, month-end portfolio and hedge adjustments seem modest.  Over the course of the month, global equities have rallied.  Of note, among the majors the weakness of the Swiss franc (vs euro) and the Japan…
Quiet into Month End Quiet into Month End Reviewed by Marc Chandler on January 31, 2013 Rating: 5
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US GDP Poor, but Weakness Exaggerated US GDP Poor, but Weakness Exaggerated Reviewed by Marc Chandler on January 30, 2013 Rating: 5
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Great Graphic: Consumer Confidence and S&P 500

January 30, 2013
This Great Graphic comes from Sober Look blog. It shows how well the Conference Board's measure of consumer confidence tracked the S&P 500.  However, more recently there has been notable divergence.  
It is easy to slip into a causal argument whereby increased confidence "causes" people to buy stocks.  Yet we know that for most …
Great Graphic: Consumer Confidence and S&P 500 Great Graphic:  Consumer Confidence and S&P 500 Reviewed by Marc Chandler on January 30, 2013 Rating: 5
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Interest Rates Drive Divergence in FX

January 30, 2013
The euro has raced higher, with the $1.35 level convincingly breached and the option structure rumored to be struck near $1.3550 taken out.   The US dollar has moved to new highs against the Japanese yen  near JPY91.40.  Beneath both lay interest rate considerations.  
There is more evidence today that a tightening of euro area financial conditio…
Interest Rates Drive Divergence in FX Interest Rates Drive Divergence in FX Reviewed by Marc Chandler on January 30, 2013 Rating: 5
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CNBC Video Clip: FX Outlook CNBC Video Clip:  FX Outlook Reviewed by Marc Chandler on January 29, 2013 Rating: 5
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