US unemployment improves again but gold defies gravity US Unemployment rate dropped to 5.6% and in December the US economy created another 252k jobs, topping up expectations for 240K. The November reading of 321K was also revised higher to a whopping 353k. But not everything behaved quite as one would have expected it…gold was bullish up at least 10$ (from where it was prior to NFP) making it to session highs of $1221.45. US dollar index also eased below 92.00 levels after closing at 92.36 on Thursday. Was it a case of buy the rumour sell the fact? Not necessarily. At a first glance it was just US Average hourly earnings that failed the test last Friday and looking deeper it transpires that the -0.2% was the slowest pace of growth seen since 2012. Beyond average hourly earnings however, even a drop in labour force participation might have contributed to at least some of the recent improved unemployment numbers from the US. The USD’s gains in the recent weeks are undeniable and the buck has topped the list of best performers amongst the major currencies in these past weeks and months according to the BCWI index. Even fundamentally the Fed’s monetary stance vis-à-vis the other major central banks really explain the USD strength. US equities closed in the red last week, the situation is Asia remained very much similar despite some mild positive exceptions. This week traders will continue to look at the US data for further confirmations. Next Wednesday we’re expecting Retail Sales, Business inventories; Thursday the Philly Fed Survey and we will close the week with the CPI index.
Posted on: Mon, 12 Jan 2015 08:29:23 +0000
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