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Tag Archives: non farm payrolls

After ADP superby performance of 253K versus forecast of 181K, Wall Street and Main Street were anxiously awaiting NFP tonight.

Then again, there were many times when NFP surprised us all with a weaker number.

I decided to play my straddle to capture the market either way: –

Bought a EURUSD Put Option expiring Monday, June 5th; Spot 1.1215 and B/E 1.1189

Bought a USDJPY Put Option expiring Monday, June 5th; Spot 111.59 and B/E 111.26

As it turned out, the NFP number came in considerably weaker at 138K versus forecast of 181K and previous month was also adjusted lower.

The EUR strengthened agaisnt the USD, so my put option was useless.

However, the JPY strengthened against the USD and put my USDJPY put option into the money.

I decided to square the USDJPY put option at 110.57.  It was sufficient to offset the cost of both the options and left me with a decent 36 bps trading profit.

Last week, I short the USDJPY at 102.95 and again at 103.52 for an average cost of 103.23.

By the end of the week, I was getting uncomfortable with the possibility of a strong NFP, so I decided to cut loss at 103.53 and took a loss of 0.30 yen.

Late Friday, USDJPY strengthened to 102.80 just before NY close behind a softer NFP.  However, the NFP of 156K versus expectations of 171K wasn’t too bad especially, since the previous month was revised from 151K to 167K.

The US is on track for a rate hike in December 2016!!!

I also did a trade on the USDJPY but not a straddle trade, instead, I just took an off chance view that the NFP could come in weaker and placed my bets on the JPY as follows: –

USDJPY: Stop if Offered; 108.53, Spot; 108.83 with SL; 108.80

As it turned out NFP came in very weak and my out of the money trade was triggered.

I squared the EURUSD earlier, and kept the USDJPY trade alittle longer and got out half an hour later at 107.45 for one big figure trading profit of 1.08!!!

Best part about it was I got out of this trade while in a lounge with friends drinking wine.

Here is wishing all a great TGIF – Thank God It’s Friday!

This week has been a sleepy week despite important events like ECB, manufacturing data, ADP and of course, tonight, NFP?!

Since there weren’t any trading opportunities throughout the week, it would stand to reason that the FX markets would be ‘itchy’ to create a movement if a sufficient reason was given.

Today’s NFP to cap off a lacklustre week or is it?

Anyway, we had to be there, so at 8:28pm, I put in my trade as follows: –

EURSUD: Stop if Offered; 1.1125, Spot; 1.1154 and Stop if Bid; 1.1180 with corresponding SLs at 30bps away on both sides of the goal posts.

As it turned out, NFP came out at a shocking 38K versus forecast of 159K, with alittle offsetting by unemployment rate at 4.7% verusus 4.9%

My Bid trade was triggered at 1.1180 and I waited till about 5 minutes later and squared at 1.1260 for a trading profit of 80bps……….not bad!

Thank you NFP!!!

Everyone have a great weekend!

I am out of here and going to take my wife out to meet friends for drinks.

The non farm payrolls is one of the important numbers the FOMC will be looking at for the potential rate hike two weeks from now.

I decided to place my straddle at 9:28pm with the following details: –

Sell EURUSD, Stop if Offered:  1.0880

Spot: 1.0900

SL: 1.0900

As it turned out, NFP came in higher at 211 versus forecast of 201, more importantly, last month’s number was adjusted upwards from 271K to 298K.

Unfortunately, the EUR whipsawed, my trade was triggered at 1.0877 and it was squared at 1.0907 for a trading loss of 30bps.

You can’t win all the time.

EURUSD is now hovering at 1.0877 @ 9:45pm.

Ok going to shut down for the week.  Here’s wishing all a great weekend.

It’s interesting the whole world was focusing on Janet Yellen’s speech and responses at the Senate Banking Committee on Tuesday and Wednesday.

All the major banks have concluded together with the media that the word, ‘patience’, will be dropped in March and any rate hike if any will happen in June.  Two dates momentarily cast in stone for now.

In my view, jobs creation, employment and unemployment are more important data compared to inflation for Janet Yellen.  Though, recent CPI data suggests low inflation and that the revised 1.7% target rate may not even be hit is a lesser concern, then non farm payrolls and unemployment.

If I study the history of the past Fed chairmans including Greenspan and Bernanke, they usually get ahead of the curve and market expectations.  They don’t like to be dictated by the media.

In the same tone, I believe Yellen will not subject herself to the pressures of the media, which is why her responses to Congress was non committal.

I believe she will pre-empt the markets and raise interest rates earlier than June.

I believe she will surprise the markets by raising rates in May.  As long as non farm payrolls stay above the average of 200,000 and higher, it will give her the confidence to make the decision.

A strong US dollar is not necessarily a bad thing for the United States.  Let’s not forget that the U.S., is a domestic economy and it only exports barely 6% of its GDP.

Therefore, ensuring that employment stays strong and wages bouyant will give Yellen the confidence to raise rates.  High employment and good wages means American can better support consumption which is a main driver of the economy.

I believe inflation is on the rise in the U.S., although it doesnt seem to be manifesting in the data.  Real estate prices are at all time highs and so is the financial markets thanks to cheap liquidity.  However, can it be said that the fundamentals are supporting the real estate market  and financial market?

Let’s see.