The US Trade Deficit narrowed to 58.2 Billlion.  This is good for GDP. The dollar is getting a bid off of that.  Imports slowed and exports also slowed.  This indicates slower US and possibly slower global growth as well. 

The market does not really know how to interpret the data I feel.   On one side, a lower deficit is a boost to GDP.  On the other side, the slower imports and exports is a sign of weak domestic economy.  So, expect pushes one way, then the other.  

Friday May 9, 2008

Good Morning:

Last night’s jump in oil prices and continued concerns over the equity markets contributed to the dollar’s weakness overnight.

Oil rose over $125/barrel as attacks against Nigeria’s oil supply continue, and speculation that this may lead to lower exports by Nigeria-thus curbing US supplies as the summer driving season starts Memorial Day Weekend.

World Equity markets are ending the week on a lower note.

US futures are lower this morning.

Oil: $125.12

Gold: $887.00

Trendline resistance comes in at 1.9469.  A break will target lower levels.

The 200 day moving average for the NZDUSD comes in at 0.7665.  A close below this level today would be bearish for the pair.  In January, the pair had one day when it closed lower, but rebounded back above it the next day.

The Employment Change number comes out higher than expected at 19.2K from the previous 14.6K.  10.0K was forecast.

The Unemployment Rate comes out a drop higher as well at 6.1K from the previous 6.0%.  No change was expected. 

With the unexpected job growth, the CAD was able to firm up initially vs. the USD after this data. 

USD/CAD touching what looks like formation bottom in a comparatively benign CAD number for Unemployment rate and change in net employment, which came out as 6.1% and +19.2k.

The net change in employment rose 19,200 jobs in the month of April.  This was greater than expected.  The unemployment rate at 6.1% is the highest rate since June 2007.  The low was 5.8%. 

Construction (+16,200), food and accomodation (+22.200), education (+13,800) and energy sectors benefitted the most.  While agriculture (-5,400), manufacturing (-14,900) and Managment (-11,700), led the job losses.

USD/CAD getting a little bounce this hour though Crude is near its highs. We have some CAD data out in ~30 min which should bring some interesting price action...

Crude Oil has hit another high today at $125 a barrel.  We see this as the USD has taken a hit through Tokyo and the start of London session.