Prepared by Jeff Halley, Senior Market Analyst
Payrolls well above expectations
The U.S. sprung a blockbuster Non-Farm Payrolls on the markets on Friday, payrolls rising 304,000 vs 165,000 expected.
Source: MarketPulse
If the lack of traffic around my neighbourhood in Singapore is anything to go by this weekend, Asia has well and truly settled into Lunar New Year holiday mode. Most of the region will be closed, at least for part of the week as the Chinese welcome the Year of the Pig. This likely means quiet Asian trading sessions.
The region’s highlights will likely come from Australia. Today the Royal Commission releases its findings on the banking sector and tomorrow we have the RBA rate decision. It will be watched closely given the ructions in the housing market.
FX
The U.S. Dollar had a positive Friday session buoyed by the payrolls data. It wasn’t a spectacular rally though, implying that a dovish Federal Reserve continues to be the main story in town.
The Australian Dollar (AUD) may struggle to continue its stronger gains due to tomorrow’s RBA decision and also retail sales. The street will be eagerly searching for any dovish change from the RBA on rates. A shift in stance could bring AUD’s recent rally to an abrupt end.
Regionally, Asia FX trading will be quiet due to holidays with the only highlight being a Philippines rate decision which we expect to be unchanged.
Gold
Gold gave up some of its gains on Friday in the face of a resurgent dollar. Asia will be quiet today with traders content to pick up gold on dips, only a break of 1,300 support would send alarm bells ringing.
Oil
Both Brent and WTI rallied some two dollars on Friday post the sparkling Non-Farm Payrolls. WTI looks the more bullish of the two as cold weather and Venezuela continue to potentially effect the supply situation.
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Andrew Robinson
Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
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