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| Technical levels |
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Resistance |
Support |
| EUR/USD |
1.3500 |
1.2900 |
| GBP/USD |
1.6070 |
1.5500 |
| GBP/EUR |
1.2200 |
1.1700 |
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| Economic releases |
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LAST |
EXPECT |
| UK Services PMI |
54.0 |
53.3 |
| EU Services PMI |
50.5 |
50.5 |
| US Non Farm Payrolls |
200,000 |
140,000 |
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China considers aid for Euroland
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- US employment report today
- And services sector PMIs
Good morning. In the great tradition of discovering the blindingly obvious, researchers at three American universities have found that users of the social networking site Twitter don't have much of value to say. A survey of 1,500 twits revealed they did not even bother looking at quarter of the tweets they received. Extrapolating the survey results across the Twitterverse, 130 million tweets a day are dismissed as pointless, two thirds of the total. The researchers, who had expected that proportion to be nearer 95%, concluded that tweeters' appetite for banality is far greater than even the biggest cynic could have imagined.
It might be worthwhile to make a similar study of Euroland news items. Surely at least two thirds of them must be irrelevant, misleading or otherwise worthless. The unending flow of official comments on the sovereign debt crisis is a shining example of what a Yorkshireman would describe as "talking a lot and saying nowt". But there emerged yesterday what could turn out to be a nugget. In a joint press conference with the German Chancellor yesterday, Premier Wen Jiabao said China was "investigating and evaluating concrete ways in which it can, via the IMF, get more deeply involved in solving the European debt problem". If that investigation and evaluation were to come up with a way for China to buy Italian bonds it would be a game-changer.
There was surprisingly little reaction to the Chinese premier's comment, perhaps on the I'll-believe-it-when-I-see-it principle. Having said that, there was minimal reaction to anything at all in the FX market on Thursday. Investors might have been minded to do something about a monthly fall in eurozone factory gate prices, which slashed the annual rate of increase by a percentage point to 4.3%, but they had no idea what it should be. The UK construction sector purchasing managers' index was a couple of points lower but at 51.4 it remained in the growth zone above 50, letting sterling off the hook. Weekly US jobless claims were slightly fewer than forecast but today's non-farm payrolls number is far more important.
The lack of inspiration left currencies to drift aimlessly, resulting in little net movement. All the major currencies start today within a couple of dozen ticks of yesterday's opening levels.
It would be a surprise to be able to say the same on Monday morning. There are not many statistics on today's list but they are important ones. Services sector PMIs from Australia (51.9) and China (52.5 and 52.9) came out earlier and were refreshingly positive. Germany, France, Euroland and Britain are all expected to deliver figures above 50 this morning, as is the US this afternoon. Analysts also expect good news from the Bureau of Labor, with a 16th consecutive monthly increase in non-farm payrolls. The consensus guess is 150k new jobs. The equivalent Canadian figure, released an hour and a half earlier, is estimated at 24k.
The better-than-expected US payrolls figure a month ago eventually sent the dollar lower, the logic being that an improving US economy meant less appetite for the safe-haven currencies. That logic (if it is logic) should hold good today but don't bank on it. Have a good weekend.
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