EurAnalysis

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http://wallstreetexaminer.com/2012/0...but-they-wont/

My guess? The headline non farm payrolls number would be reported as a drop of 337,000 tomorrow if you believe the withholding tax data for the period covered by the survey. That would be a huge miss versus the consensus estimate of a gain of 201,000 according to Hizzoner the Mayor’s tout sheet. Rupert Hacker Murdoch’s rags are even more bullish, posting an expected gain of 210,000.

The number will be nowhere near a drop of 377,000, of course. It is an election year after all, and the February number that is the basis for the comparison will probably revised down so that the headlines aren’t screaming bad news. In addition, a big part of the reason my swag is that low has to do with the survey date. There was some weakness in early March withholding tax data that was solidly reversed late in the month. So if the number is weak, it’s probably a head fake. The withholding data was much stronger by the end of the month and if this continues April would be up huge.

I’m not a conomist, but given their record, my guess is as good as theirs, so I thought, let’s play “guess the number.” You can play along with me and place your bets accordingly. But, even assuming I’m right, which is unlikely, would a miss be bullish or bearish?

A small miss would probably be a non event. A big miss would most likely be bullish, because the players would probably start betting on more QE again. On the other hand, a beat would most likely be sold, because that would convince everybody that there really really won’t be any more QE. We’re at that stage of the game where bad economic news is bullish if it’s bad enough. Good economic news is bearish because the kids in the market playground know that it means no more candy from Dirty Old Ben.
So, how did I arrive at my wild guess?

I track the daily Federal withholding tax data for the Wall Street Examiner weekly Treasury Update. By comparing the year to year change in withholding for the survey period versus last year, adjusted for the change in wage levels, I can get an idea of the change in total employment for the month. The next trick is to convert that to a seasonally adjusted number and compare my seasonally fudged number to the seasonally adjusted number for February to get my headline number.

The government conducts its establishment survey to include the weekly payroll data for the week that includes the 12th calendar day of the month. Due to the fact that last year the 12th was on a Saturday, Houston, we had a problem. I assumed that the BLS would count that as part of the week before. If you compare that week with the same week this year, the rolling average weekly withholding for that week averaged about 1.1% higher than that week in 2011, as adjusted by the employment cost index. On that basis, nonfarm payrolls for March should be 1.1% higher than they were in March 2011. The calculation for the estimated not seasonally adjusted March payrolls was:
March 2011: 130,061,000 x 1.011 = 131,492,000.

The next step was to convert that to a seasonally adjusted guess. I backed out the SA factors for the last couple of years, and for March it has been 1.0066 times the NSA number. The calculation for the seasonally adjusted nonfarm payrolls would be:
131,492,000 x 1.0066 = 132,360,000

The February level reported last month was 132,697,000. That implies a drop of 337,000 from the February SA number. But the February number is certain to be revised, so there’s no way the BLS will report a negative number that big. Even so, if you believe that withholding taxes are a good measure of employment, then the number should be negative. Later in the month withholding taxes surged and turned strongly positive, but that should not have been included in that pay period.

In truth, I have no clue where this number will be. If the BLS uses data from the following week, they could conceivably come up with a gain, but it’s hard to see how it could reach the consensus conomist expectations of 201,000 to 210,000.

But then they have no clue either.

Kno's Comments:

My GUESS is 150.000 however the more important number in certain ways will be the UI number if it is far away from 8.3%.

I would call this a credibility number as much focus is now on that number since it discredits any number since they stop counting those that just blow their brains out like in Greece the other day.

I do not take that death lightly however it does make a real life point.

They call it the BLS... U just drop the "L" and call it BS.

http://wallstreetexaminer.com/2012/04/05/on-fx-3/

Reposted from Bruce Krasting’s blog with his permission.

There was a mini flash crash in the EURCHF cross this morning. Two charts on the price move:
(Link and Link)

http://4.bp.blogspot.com/-XewI7kiqrr...0/echf%231.png
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http://3.bp.blogspot.com/-4dRbUJRQRO...f%232+copy.png

I was watching markets on a screen. When I saw the EURCHF price break I called a lady I know on an FX desk. She picked up the phone after a few seconds and yelled at me.

“FX Bank is prepared to buy Euros and sell Swiss Francs at 1.2016 currently. There is no breach of the CHF peg at this time. It was just some computers gunning stop losses. Nothing to worry about. Please excuse me, as I have to take another call. Have a nice day!”


The price break took place in under a minute; it might have been for just a few seconds. There are some reports that the Swiss National Bank (SNB) actual bought some Euros during the fray. I’m not sure that is true. If it did happen, then the SNB bought them from a computer, and the computer lost money.

What happened this A.M. shows that the EURCHF market is wound tight.


It could uncoil quickly. I have no doubt that the SNB has resting orders in the capital markets for buying up to 10 billion EURCHF. I also don’t doubt their resolve to do more. But nine hours after the mini crash the EURCHF is sitting at 1.2021, a measly 0.17% away from the SNB wall. That’s too close for comfort. Something has to give. Another bad day in the Spanish bond market might do it.

If we see a headline in the next few days that the SNB was forced to actively defend the peg, and in the process absorbed tens of billions of Euros, it will be very unsettling across all markets. It would be a sign of financial desperation; the ultimate “risk off” move.

I don’t think it’s possible for the EURCHF to trade so close to the peg without some accident happening that could start the hot money rolling. Either we drift back up to the “safer” mid 1.20’s, or we’re going to have an Intervention Party. This might sort itself out by the weekend. One thing is certain, the US VIX is not priced for a hard landing of the EURCHF.

http://2.bp.blogspot.com/-JEV73vh0U3...spring+(2).JPG

Kno's Comments:

Be AWARE just in case. EUR/CHF now trades at 1.2015 with low at 1.20075

http://www.financialsense.com/contri...ed-on-qe-crack

PLEASE READ ON....

http://www.financialsense.com/sites/...ket-040512.jpg

The markets have just finished putting in the best quarter since 1998. How do you know? All you had to do was flip on a television, pick up a paper or scroll internet headlines. The media has been abuzz with comparisons and ebullience that the rally was evidence that the economy is back. Unfortunately, the reality is that the outsized rally wasn't driven by a robust economic recovery, stable employment, fiscal stability, a booming housing market or an innovation wave like we saw in 1998. None of those variables are present in today's landscape. Instead, the recent surge in the markets was based upon the combined effects of liquidity injections from "Operation Twist" in the U.S. and the "Long Term Refinancing Operations" (LTRO) in Europe. With both of these liquidity injected highs now starting to recede the "addicts" are starting to look for their next hit.

Wall Street was hoping to get their next "dime bag" of liquidity infected goodness at the most recent Fed meeting. Unfortunately, Ben "The Dealer" Bernanke didn't show and the symptoms of withdrawal immediately hit Wall Street. What is worse is that we now realize that it isn't just Wall Street that is addicted to the Fed's "crack" - somewhere along the way the media got hooked too.

You can almost feel the onset of withdrawal as you watch the media scramble for cover and asking each other how much longer until the next "fix" will arrive - a 5% decline or a 10% decline? The reality is that during normal, healthy, bull market cycles corrections of 10% are very common - not a sign of needed liquidity support. That is, of course, in normal and healthy bull markets. Today, the Fed must withdraw the support long enough to determine whether or not the economy, and the markets, can function on their own. They have found out the last two times this was not the case. Maybe this time will be different?

http://imagesize.financialsense.com/...gdp-040512.jpg

Furthermore, "the era of quantitative easing" while fueling rises in the stock market, primarily in junk assets, has not pushed the economy contradicting what is widely believed.

http://www.actionforex.com/markets/economic-calendar/

12:30 USD Change in Non-farm Payrolls Mar 210K 227K 12:30 USD Unemployment Rate Mar 8.30% 8.30%

Good morning! Price finally stabilized and stayed above 1.3060 all the way through Asia. Now, on the 4H chart there is an analogy with previous price action at the end of February. RSI is confirming it, and the tops were V-shaped before the move down. Today, after 4 negative previous days, we sit at a powerful fib and NFP is coming out, so this could trigger a strong reaction. The target should be around 1.32. Good luck and trade safe!

for intraday, get ready to slip through...

Ha ha you have firm believe .. eh? nothing will happen till NFP release get a wrapper and sleep

Good morning everyone. It's Friday and it's NFP day. The banks and stock exchanges are closed but the Interbank markets and futures trading are open for business as usual. This means very thin trading and in such thin markets, swings tend to be wild. So on that premise, let's look at the possibilities for today's NFP reaction.

There are several factors to consider in the NFP report. It is not just a matter of the big number compared to the estimated and previous numbers. There is also the breakdown of where these jobs were created (or lost).

We have private sector and public sector jobs. In the private sector we also have a further breakdown of service sector and manufacturing sector jobs.

Over and above that, we also have the unemployment rate to watch.

Furthermore we have the average hours worked and the average hourly pay.

All these components are important when analysing how the market will react.

In order to call it a positive number today, we need to see a number as expected or better than expected in all categories

Here is the consensus of what is expected.

Jobs Created: +207K
Unemployment Rate: 8.3%
Avg hourly Earnings: +0.2%

My view is that as long as all 3 numbers come out as expected or better, the result should be USD positive as an initial reaction, followed later in the session by some positive reaction in the equities futures which will stabilize the USD gains and thereby the E/U pair. The better the number, the more pronounced the gains in USD will be.

If we get a good jobs number but the unemployment rate goes up to 8.4% (which is quite possible), then that is going to renew the fears/hopes of further easing by the FED. Therefore the initial reaction will be USD negative. However, since this will also cause a bit of a risk-off sentiment, the drop in USD will soon be countered by a reversal due to safe haven seekers. This will also be very bearish for the USD/JPY pair. However, the EUR/USD pair will most likely whip up and down and essentially go nowhere. This reaction is also likely if all the numbers are worse than expected across the board.

Anyway, it should be an interesting day. Keep in mind that the normal reactions to this report will most likely be seen on Monday and/or Tuesday more so than today, yet I expect today's reaction to be a preview of what is to come next week once the big players are back in the market.

From a technical perspective, the pair is clearly in oversold territory in the lower time frames. However, this is very clearly being relieved through the consolidation we have been seeing since price hit yesterday's lows. The longer price consolidates, the more relief is applied to overbought/oversold indicators.

As most of you already know, I only use the lower time frames to pick my entries and I do most of my analysis on H4 and higher time frames.

Starting with H4, price is currently sitting on the 50% fibo level of 1.2623-1.3485 move up since mid January.

This is a very important level as a move and close below here puts the bears in firm control and opens up the double bottom (and demand zone) of the 1.30 area, a break of which takes us to the next support/demand area at 1.2973 and the 61.8% fibo level at 1.2952

On the top side, I would expect a retrace to the 38.2% fibo level at around 1.3150/60 area which also retests the broken rising channel (RC-1) support which was broken easily on Wednesday and confirmed on Thursday.

E/U H4


The daily chart pretty much tells the same story for the upside. On the downside, the ultimate target would be the falling channel (FC-2) support which if reached today would be at around 1.2930. On Monday and Tuesday it will be lower in the range of 1.2910. These areas offer the opportunity for a good bounce if we don't get it today.

E/U Daily


So, I wish you all a safe and profitable day today.
Best of luck
PT

P.S. For our Christian friends, Happy Easter, and for our Jewish friends, Happy Passover. For the rest of you, Happy long weekend.

Nice observations, PipTrapper!
May I add my two cents?:
I believe there is someone still sitting at trading stations in big dogs houses with instructions to act if employment data will be clearly positive or clearly negative.
And if price will jump significantly (let say 40 pips or more) with initial reaction or it will break lows - automated systems will kick in too.

... like this

Like that!

Yes absolutely there are. However, it will still be very thin trading. With less counter parties in the market, the moves will be more pronounced thereby making for wilder swings.

Daily

Forex weekly outlook and forecast

 

1. Posted by John on April 6, 2012 at 9:45am

http://www.forexstreet.net/profiles/...k-and-forecast


For the upcomiing week, expect the Euro to plummet in its currency valuation and against the basket of currencies, as concerns about the euro zone debt problems. Investors are concerned about the euro zone periphery countries ability to borrow money after the Spanish bond yields jumped following a poor debt auction. This Spanish bond yields will affect the valuation of the euro for the coming week, as most of the periphery countries all show pessimism in their respective fiscal targets, particularly Spain. The Euro dropped against the US dollar to 1.3035 from 1.3164, a 1% decline. Versus the Swiss franc, the single currency slid to 1.1997 from 1.2040 after better than expected Swiss inflation March figures. The Swiss National Bank said that it remains ready to intervene in the markets in order to defend the 1.20 exchange floor but the central bank’s credibility may be questioned.

Kno's Comments:

The above view is one of fundamentals. Fundamentals are determined by new information. Today we have a new determination to make. Is the information released correct or is it incorrect information ?

When the 10 Year Bond Yields go up in Spain that is clearly what the number shows.

When the UI rate in the USA comes out at 8.3%, is that the right rate ? No it is not. Then with the false data wrong perceptions form in the market and the market reacts accordingly.

Then new data comes out that is opposite from the formed perceptions and the markets reverse including all the technical indicators.

Trading forex is a matter of values and then we have INTERVENTION short term.

EUR/JPY is at 1.2013 at the moment. What happens if there is INTERVENTION as has been stated by the SNB ?

Where will EUR/CHF go to and how will it affect EUR/USD ?

The Forex Currency markets close at 11:15 AM EST as just mentioned on CNBC now.

In 27 minutes we will have new data and new movements.

Enjoy your Easter or Passover or Whatever you believe in. Life is interesting and fun if you have a positive mental attitude.

Good Trading !!!

In This Issue.

* Risk assets trade in a tight range.
* The games people play now.
* SNB credibility up for sale.
* Richard Russell on Good Friday!


And, Now, Today's Pfennig For Your Thoughts!


A Jobs Jamboree Friday!


Good day. And a Happy Friday to one and all! It's Good Friday for those of us that observe it that way. Good Friday, for the markets means that the stock jockeys have headed to the Hamptons already, and the bond boys & girls will close up shop early today, so they can get a head start on getting out of town too.

All this means is that the markets will be thin today, which could very well cause some wild swings, so be prepared for that should that occur.

And the wild swings could begin right out of the starters blocks this morning when the April Jobs Jamboree prints at 7:30 CT. So, let's talk about the Jobs Jamboree before we get into the currencies, and metals. (they were boring yesterday. ) Right now, the "experts" have forecast a net positive job creation number for March of 205,000, with the unemployment rate remaining at 8.3%... according to the Bureau of Labor Statistics (BLS). Long time readers know my dislike for the BLS, because of their "adjustments" that they come up with. Their numbers are useless to me, but. the markets get all lathered up over them, and I deal with the markets, so. I have to address them. UGH!

I've always contended that the way the BLS reports job creation is dumb. They don't tell you what kind of jobs were added. So, you could have a strong number on the jobs report but the majority of the jobs were min. wage, not that there's anything wrong with that, but for an economy to grow that doesn't help. That's why I've always looked at the Average Hourly Earnings and Average Weekly Hours Worked number in the Jobs Jamboree, for signs of inflation.

But to play along with the silly people that think the BLS numbers are good. I'll say that the BLS will report more jobs created than the 205,000 forecast. But, at some point, here the jobs market is going to overheat. and we'll begin to see these monthly numbers weaken. But that's just my opinion, and I could be wrong.

The games people play now. Every night and every day now. you tell them Joe South!

But for today, especially given the markets being thin, a stronger than expected jobs data number could push the dollar higher, and if it hits any technical levels, the wild swings could begin.

OK. the currencies traded in a very tight range yesterday, with the euro able to hold its head above the water line at 1.30. The Aussie dollar (A$) recovered a bit back to $1.03, but all-in-all, it was a boring day. Gold & Silver tried to mount gains and did for the most part, but they were small in comparison to the size of the drops we've seen in the two metals lately.

I would think that the drop in the price of Gold has been overdone. but that all depends on what the U.S. Gov't thinks about the whole market. I say that in reference to the Wikileaks article that I told you about a couple of times in the past. Remember? The memo basically said that the U.S. Gov't manipulated the price of Gold, because they didn't want people selling their dollars for Gold, and thus killing the need for dollars. Hey! I didn't make that stuff up. it didn't come from Chuck's closet of conspiracy stories. it was right there in the Wikileaks.

Inch by inch, step by step, the Swiss franc closes in on the 1.20 "floor" that the Swiss National Bank (SNB) put in place for the euro/ franc cross. And in today's thinned out markets, a full-on breach could be in the cards. And the SNB will have to react, or else, have their credibility questioned. And if the markets smell blood. they will go after the SNB's policy and leave it in shreds.

Which means that if the SNB does react by selling francs and buying euros, the franc will lose ground VS the dollar. But IF the SNB sits on its hands, and the markets have their way, the franc will rise VS the dollar. And then the final thing is that nothing happens today, and we go into the Easter weekend without any movement. I can tell you that I'm sure the SNB is hoping for what's behind door #3.

I know between all the dying of eggs and getting your Peeps stale, that you'll want to check to see if China did anything this weekend. The Chinese like to announce things on Weekends, and this would be a great weekend to announce something that the Chinese would like to fly under the radar. That something? Ahhh grasshopper. I'm looking for China to announce a reserve requirement reduction, which as I've told you before is just like a rate cut.

Monday is also a holiday for some countries. Easter Monday. I've always wondered why we didn't celebrate that as a holiday here in the U.S.

I see where the chief architect of the Twist & Shout, I mean Operation Twist, is going to resign his position as the head of the N.Y. Fed. Brian Sack has resigned. I tell you this, because about a month ago, I dear reader sent me a very long list of the Central Bank heads, the heads of major banks around the world, and finance ministers that have resigned or been fired in the past year. the number is quite large. and I just can't help but think that this could be akin to getting out of Dodge. Or getting out while the getting is good. Or any other phrase that fits here.

OK. pushing the envelope there I do believe, but what the heck you only live once!

I really got a late start today, so with the currencies in a tight range, and nothing new to talk about there, and with the Jobs Jamboree dominating things this morning, I will end the Pfennig quickly today. So, let's all head to the Big Finish!

Then There Was This. First, long time readers of the Pfennig know just how much I admire the great Richard Russell, the author and "grandfather of market letters" of Dow Theory. So, Richard Russell was speaking yesterday. and had this to say. "My guess is that this is the big money that has been holding off as long as it decently can, and then dumping their goods just before the close. I don't think that big money likes this market, and I think they have been slowly exiting this market, as quietly as they can." He went on to say that, "The big money tends to look out six months to a year or so, and there is something out there that they see, and don't like. Is it a rise interest rates, is it the power of the Chinese yuan, is it a further collapse in real estate values? Honestly I don't know what it is, but I'm convinced that there is an ominous something out there waiting to materialize. The big money, the institutional money, doesn't want to be in this market when it materializes."

Chuck again. big money is shorthand for "savvy investors". and doesn't this play nicely with my call that we are in the eye of the storm right now, and when we head to the other side of the storm things are going to get scary? You bet it does! Thanks to Richard Russell for his thoughts this morning.


To recap. It's a Jobs Jamboree this morning, and it's Good Friday, which means the markets will be thinned out, and could cause some wild swings. The currencies and metals traded in a tight range yesterday, with the euro able to keep its head above the 1.30 level. And the SNB is hoping for a quiet Easter Weekend.


Currencies today 4/6/12. American Style: A$ $1.0326, kiwi .8185, C$ $1.0080, euro 1.3075, sterling 1.5865, Swiss $1.0880, . European Style: rand 7.8345, krone 5.7810, SEK 6.7435, forint 225.80, zloty 3.1760, koruna 18.8325, RUB 29.48, yen 82.35, sing 1.2590, HKD 7.7655, INR 51.11, China 6.3052, pesos 12.87, BRL 1.8215, Dollar Index 80.02, Oil $103.31, 10-year 2.19%, Silver $32, and Gold. $1,632.75

http://www.EverBankWealthManagement.com

EverBank World Markets
A Pfennig For Your Thoughts
Friday, April 06, 2012

The US Bond Yield on the 2 Years is .35% and the Yield on the 10 Year is now 2.20%.

The Dow Futures are up 24.

EUR/USD is at 1.3057 and EUR/JPY is 1.0771

USD/JPY is at 82.48 and EUR/CHF is at 1.2011

Here we go.... 4 Minutes...

whats going on? the market doesnt move today.
?????

Lets look closer

hoo news...