Forex Flash: NFP's in focus ahead of US Election - BTMU
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USD/JPY
FXstreet.com (Barcelona) - Core EU PMI manufacturing reports were released this morning with most beating analyst expectations with the exception of Spain but critically all remain below the 50 expansion-retraction watermark. Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ believes that Greece will come back into focus again next week with pressure on the Greek Government to pass austerity measures ahead of the Euro-Group meeting on November 12th.
Looking forward to the US session, Halpenny understandably concentrates on the impending impact of NFP's. He notes that yesterdays ADP report revealed a 158k gain after a downward revision showed 114k in September. He highlights that a new methodology is being used with ADP working with Moody's and consequentially when looking at claims going back to 2001, there is a 96% correlation with revised BLS payrolls data. Halpenny feels that we may see a pick up in private payrolls from the 104K gain last month, "but the ADP data suggests no major improvement in employment conditions." The BTMU in house NFP model gives an estimate of 135K for today's report.
Elsewhere, Halpenny takes a look at the upcoming US Presidential election and believes the result is important in a number of ways for USD and especially USDJPY. A Romney election has promised to cite China as a currency manipulator on day one in office and this step would certainly make it more difficult for Tokyo to take a more aggressive stance in limiting Yen strengthening through intervention if Washington were to up the ante regarding Asian currency manipulation.
Also Halpenny notes that we could expect a less pro-QE Fed Chairman to be appointed after Bernanke's term is completed in January 2014. However, the house view at BTMU is that President Obama will get re-elected due to the Sandy related momentum and the fact that he still holds slim leads in swing states. "Ohio alone of the swing states might be enough for Obama judging from his current college count of 253 based on strong and leaning Democrat states (according to Huffpost). Obama needs 270 to win and Ohio offers 18 college votes."
Looking forward to the US session, Halpenny understandably concentrates on the impending impact of NFP's. He notes that yesterdays ADP report revealed a 158k gain after a downward revision showed 114k in September. He highlights that a new methodology is being used with ADP working with Moody's and consequentially when looking at claims going back to 2001, there is a 96% correlation with revised BLS payrolls data. Halpenny feels that we may see a pick up in private payrolls from the 104K gain last month, "but the ADP data suggests no major improvement in employment conditions." The BTMU in house NFP model gives an estimate of 135K for today's report.
Elsewhere, Halpenny takes a look at the upcoming US Presidential election and believes the result is important in a number of ways for USD and especially USDJPY. A Romney election has promised to cite China as a currency manipulator on day one in office and this step would certainly make it more difficult for Tokyo to take a more aggressive stance in limiting Yen strengthening through intervention if Washington were to up the ante regarding Asian currency manipulation.
Also Halpenny notes that we could expect a less pro-QE Fed Chairman to be appointed after Bernanke's term is completed in January 2014. However, the house view at BTMU is that President Obama will get re-elected due to the Sandy related momentum and the fact that he still holds slim leads in swing states. "Ohio alone of the swing states might be enough for Obama judging from his current college count of 253 based on strong and leaning Democrat states (according to Huffpost). Obama needs 270 to win and Ohio offers 18 college votes."
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