Were the NFPs totally weather distorted

A very weak payroll number has continues to keep the dollar weak as positioning data adds to the volatility. The 78k increase in payrolls, plus the 34k in positive revisions, was a huge miss versus the 200k+ that was expected. The markets were unanimous in thinking that revisions will be likely in coming months due to the weather likely distorting this data as I predicted in Friday’s report.

The most concerning part of the report comes in the form of the participation component that saw a further 347,000 people leave the work force in December, with the detail being even more worrying for me as it wasn’t the youth deciding to further their education or people retiring. It was the 45-54 year-old bracket that decided to leave the work force.

The CFTC positioning data for the week ending January 7^th shows the market was completely wrong footed, going into this jobs report.

- USD longs increased 20% to USD19.8bio from the prior week

- EUR longs reduced by half to USD 2.5bio

- GBP longs reduced 20% to USD 1.9bio

- AUD shorts were nearly unchanged at USD5.1bio

- JPY shorts reduced by 5% to USD15.4bio

- CAD shorts increased 5% to USD 5.6bio

- CHF longs reduced by more than half to USD0.6bio

- NZD longs increased marginally to USD 0.6bio

In other news President Obama’s administration confirmed that Stanley Fischer, former head of the Bank of Israel, will be nominated to serve as Fed vice chairman.

A quiet day ahead of us with little key data of note to look forward to with the highlight being Fed member Lockhart (Non Voter) to speak late in the European session but I feel today will be about the pain in the $ long positioning.

EUR/USD

Supports 1.3630-1.3575-1.3525 | Resistance 1.3690-1.3725-1.3750

USD/JPY

Supports 103.25-102.75-102.30 | Resistance 103.80-104.50-105.20

GBP/USD

Supports 1.6415-1.6380-1.6330 | Resistance 1.6520-1.6545-1.6600