Key overnight events:
- US labour market ended 2015 on a high as Dec non-farm payrolls rose by 292k (vs 200k expected) and November’s figures were revised upwards by 41k to 252k. Household survey employment rose 485k, with a 0.1 percentage point rise in workforce participation rate to 62.6%, keeping unemployment rate steady at 5%.
- Despite strong employment data, US stocks closed around 1% lower on Friday, ending the first trading week of 2016 with sharp losses as concerns about China and global economic slowdown persisted. The Dow Jones Industrial Average and the S&P500 indices have had their worst 5-day performance of a year in history.
- Crude oil slumped more than 2% in early Monday trading, barely holding above the 12-year low level of $32.10/bbl.
- Asian markets extended last week’s global equity rout as Australia’s ASX, Singapore’s STI, China’s Shanghai Composite and Hong Kong’s Hang Seng indices all declined by at least 2% during the first half of Monday’s trading session.
- Spot 1.4388
- Briefly breached last week’s high of 1.4431 earlier today to make a new high of 1.4444.
- USDSGD has broken out of its 3-month-long consolidation wedge to the upside on the back of last week’s strong rise. The next resistance of 1.4530 remains in sight.
- Spot 0.6977
- Traded back below 0.7000, and flirting with 0.6896 – the low of Sep 2015.
- If AUDUSD continues to hold below the 70 cents handle, a break to the downside could potentially result in it falling to the next significant handle of 68 cents.
- Spot 1.4165
- A new 12-year high of 1.4188 was reached earlier this morning.
- Employment figures released last Friday were mixed, as 22.8k new jobs were added in December (better than the 10k that was expected), but this was predominantly fuelled by part-time employment (+29.2k), as full-time employment instead decreased (-6.4k) from the prior month. Unemployment rate remained steady at 7.1%.
- Spot 6.6729
- The PBOC set its reference rate today marginally stronger at 6.5426 (from 6.5636 on Friday). As such USDCNH has traded back below 6.7000. Friday’s low of 6.6525 should provide some near time support.
- Fresh reports have emerged in China stating that the PBOC is likely to cut banks’ RRR before the Lunar New Year holiday in February.
- Spot 8.8806
- NOK strengthened on the back of improved industrial production data on Friday, resulting in USDNOK paring back gains from last week’s high of 8.9942 and dipping back below the 8.9000 handle today.
- The previously-broken resistance level of 8.8330 looks to provide near term support. Moving forward, any continuation in the major USDNOK uptrend currently depends on the key psychological resistance of 9.0000 being broken.