Friday, November 02, 2007

Vo;atility Assured

While there is some disagreement as to which way the numbers will fall, one thing certain is that there will be more volatility coming back into the market following the release of the US non farm payroll numbers. Generally, job growth is expected to wane slightly for the period. But mixed signals are coming from an increase in manufacturing numbers, the highest since April, and a reported decrease in layoffs. While the consensus is for a modest increase of 88,000 in payroll, some estimates range as high as 130,000. Given the increasing crude oil prices and declining interest rates in the US, it will take a positive surprise to prop up the US dollar. Anything less should continue the bullish outlook for the Euro. We will continue to play the long side of the EUR/USD currency pair.

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