Non farm Friday as investors brace themselves for a surprise

The ECB left its monetary policy unchanged yesterday but it was the ever cautious President Mario Draghi’s press conference that left the euro bears frustrated. He failed to provide a signal of further rate cuts or an LTRO whilst suggesting that the market should look at the bigger economic picture and not just the monthly HICP data when analysing inflation.

As we go to press the below headlines hit the wires which may show some insight into why a normally far more proactive ECB President than his predecessor has sat on the fence.

Germany’s constitutional court says it will rule on the legality of the ESM bailout mechanism and fiscal pact on March 18.

The German court says it sees substantial reasons to suggest the OMT programme exceeds the ECB’s mandate and infringes the ban on funding member states.

The Asian session saw the AUD trade a fresh weekly high, putting the lifestyle currency on track for its largest gain since September 2013. This follows the RBA’s quarterly statement on monetary policy that revised higher its forecast for growth and inflation.

Today’s data will be all about the US jobs report at 1.30pm. Special factors (the weather) will be making the January employment report especially difficult to forecast as the market is wider than usual, with forecasts ranging from 105k-270k.

The consensus is for a rise of 183k with the unemployment rate to drop from 6.7% to 6.6%.

This morning we see the release of production and manufacturing data from the UK and EU along with the UK’s visible trade balance.

EUR/USD

Supports 1.3500-1.3460-1.3400 | Resistance 1.3640-1.3680-1.3740

 


USD/JPY

Supports 101.85-101.30-100.75 | Resistance 102.75-103.00-103.50

GBP/USD

Supports 1.6245-1.6210-1.6180 | Resistance 1.6360-1.6410-1.6460