Were the NFPs totally weather distorted?

<p>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 […]</p>

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 7th 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.



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


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



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

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.