Market Drivers December 6, 2019
- weaker on Corbyn accusation
Europe and Asia:
USD NFP 8:30
FX markets were characteristically quiet ahead of US Non-Farm Payrolls report with cable the only exception as it gave ground after several days of strong rallies.
The pound slid about 40 pips off the highs on claims by Labor leader Jeremy Corbyn that he was in possession of “cold hard evidence” that PM Johnson’s government would institute a customs border in Northern Ireland.
Northern Ireland issue has been the key stumbling block in Brexit negotiations and it will be interesting to see if Mr. Corbyn’s claims have any impact on the electorate, but so far his attempts at trying to slow down the Johnson juggernaut have flailed and failed. For now, the markets are operating under the assumption that Johnson wins a majority but the race tightens cable will see more volatility ahead.
In North America, both Canada and US see employment data today. In Canada, the markets are looking for a rebound to 10K from -1k last month and if the number comes in line it should prove beneficial to as it will convince the market that BOC will remain neutral for the foreseeable future.
In the US the situation is much muddier. On the one hand, the return of the GM workforce will add the overall total. On the other hand, all leading economic data has been negative. missed badly and the composite ISM is showing a mixed picture. As our colleague Kathy Lien noted,” While we believe that job growth improved over the last month, we are skeptical that it increased as much as 185K and anything short of 160K could trigger a sell-off in the .”
failed at the 109.50 this week and today’s dataset could set the tone for the pair for the rest of the month. If the data proves disappointing the market could ultimately push it below 108.00 carvings out a swing top in the pair. If the news is supportive, however, it could serve as a launchpad for a whole new assault on the key 110.00 level by the bulls.
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