Daily Market Commentary - 3rd February 2012
Daily commentary
The Australian dollar undulated within a narrow band against all currency majors through Thursday, as investors shrugged off the effects from a litany of economic reports throughout the day and set their sights on today’s U.S. employment report.
Yesterday’s headline Aussie economic event was a December trade balance report, which surged to its widest surplus in 2 months at AU$1.7bln from AU$1.3bln, easily overshooting consensus estimates of AU$1.2bln. A closer look at the report showed import rates continued rising, though an outpacing rate of change in exports helped spur the aggregate trade surplus. Australia’s December building approvals report, released in tandem with the trade results, painted a mixed picture with housing activity slowing by 1% in the final month of 2011 but a higher revised rate for November (from 8.4% to 10.1%).
In his testimony before a congressional budget committee, Federal Reserve Chairman Ben Bernanke repeated his fears of a bloated American fiscal deficit with no reversal in sight. Mr. Bernanke added, “Over the longer term, the current trajectory of federal debt threatens to crowd out private capital formation and thus reduce productivity growth.”
Looking into the final day of the week, investors should pay particularly close attention to China’s January PMI results as approximated by HSBC, Eurozone January PMI results, and Canada’s January employment report. The hallmark of today’s economic calendar will be the U.S. January employment results expected late this evening. Investors expect an addition of 150K jobs for the month after the 200K from December, while the unemployment rate is expected to tick higher from 8.3% to 8.5%.
Key Releases
| Indicator | Actual | Forecast | Previous |
|---|
| AU Trade Balance (Dec) | 1.71B | 1.23B | 1.34B |
| CH Trade Balance (Dec) | 2.0B | 2.85B | 2.945 |
| EU PPI (Dec) | 4.3% | 4.4% | 5.4% |
| US Weekly Jobless Claims | 367K | 375K | 379K |
| US Q4 Productivity | 0.7% | 1.0% | 1.90% |
