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Australian Stocks Continue To Rally

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Australia’s ASX 200 is starting the new month with a bang. It is currently trading up 38.5 points to 4917.30 breaking through the 4900 level. Iron ore prices broke through the US$150 a ton level and that’s helping the resource sector. Australian banking stocks continue their impressive run and have been leading the market higher.

Aussie Dollar Continues To Trade Weak

The Aussie dollar is just barely holding the 1.04 level to the US dollar after China manufacturing data came in less than expected. China’s Purchasing Manager’s Index for January fell to 50.4 from 50.6 in December. The market had been expecting 51.0. Readings above 50 do indicate expansion, so it’s still a positive number, just less than the market expected.

Further adding to the weakness in the Aussie was a report measuring Australian manufacturing dropped 4.1 points to 40.2, the lowest level since June 2009. Readings below 50 indicate contraction.

Yen Bear Trend Continues

The Japanese yen continues to trend weak as Prime Minister Shinzo Abe is closer to naming the new head of the Bank of Japan. He is expected to chose a governor who will add monetary stimulus to spur inflation and weaken the yen further. The data out of Japan continues to be weak and the new governor will need to do a lot to end the deflationary spiral that Japan has been in. The euro is trading at 124.966 yen and the dollar at 91.837 yen.

Euro Continues To Trade Strong

The euro currency is stronger against all its major peers. The euro has been rising for 2 main reasons. For one, the data out of the euro zone has been stronger than expected, signaling that the European Union is emerging from recession. Second, we have seen an unwinding of short positions. Most traders and analysts have been bearish the euro and been expecting it to go lower. As it continued higher, those traders were caught on the wrong side and forced to take their losses. The euro is currently at 1.36082 to the US dollar, breaking through the 1.36 level.

Canadian Dollar Rallies As GDP Comes In Better Than Expected

Canada’s economy grew at a 0.3% rate compared to 0.1% last quarter. The Loonie broke through parity to the US dollar after the data. Its currently trading at 1.00218 to the US dollar.

Commodity Markets Mixed

Gold and silver sold off hard yesterday while crude oil and corn are firm. Traders in each market have mixed views of the data and how that is affecting each particular commodity. Gold is currently at $1662, crude oil at $97.49, silver at $31.38, and corn at $7.41.

Lots Of Data On Tap For Friday

  • 0845 Italian Manufacturing PMI 47.6 forecast 46.7 prev (Euro)
  • 0850 French manufacturing PMI 42.9 forecast 42.9 prev (Euro)
  • 0855 German manufacturing PMI 48.8 forecast 48.8 prev (Euro)
  • 0900 Europe Manufacturing PMI 47.5 forecast 47.5 prev (Euro)
  • 0900 Italian Monthly Employment Rate 11.2% forecast 11.1% prev (Euro)
  • 0930 Great Britain Manufacturing PMI 51.0 forecast 51.4 prev  (GBP)
  • 1000 Euro Zone CPI (YoY) 2.2% forecast 2.2% prev (Euro)
  • 1330 US Avg. Hourly Earnings (MoM) 0.2% forecast 0.3% prev (USD)
  • 1330 US Nonfarm Payrolls 160k forecast 155k prev (USD)
  • 1330 US Unemployment Rate 7.8% forecast 7.8% prev (USD)
  • 1400 US Manufacturing PMI 56.10 forecast 56.10 prev (USD)
  • 1455 Michigan Consumer Sentiment 71.5 forecast 71.3 prev (USD)
  • 1500 US Construction Spending 0.6% forecast -0.3% prev (USD)
  • 1500 ISM Manufacturing Index 50.6 forecast 50.7 prev (USD)

Nonfarm Payroll Report

This is the big report of the month. All traders will be glued to their screens waiting for this release. It will affect all US dollar currency pairs, the S&P 500 and other equity indexes, crude oil and precious metals. Binary traders should pay closest attention to the EUR/USD, JPY/USD, gold, silver, crude oil, and the S&P 500 for the best trading opportunities.

As always, good luck to all binary traders in trading the report. Be sure to check back for the latest update as I dissect the US employment report.