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Loonie Remains Firm Against USD, Amidst Contrasting Performance on Jobs in December Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Mon Jan 08 18 00:31 ET

The loonie is in consolidation on Monday, after rallying the over 3-month high against US dollar last Friday. Strong Canadian job data overshadowed the weaker than expected US nonfarm payrolls. This also sent Canadian dollar over +1% higher than the greenback. The number of employment in Canada increased +78.6K in December, compared with consensus of zero, following a +79.5K addition in the prior month. The unemployment rate dropped -0.2 percentage point to 5.7%, compared with expectations of a +0.1 percentage point increase to 6%. In the US, nonfarm payrolls increased +148K in December, missing expectations of 189K, after an upwardly revised +252K addition in November. The unemployment rate stayed unchanged at 4.1%. Average hourly earnings gained +0.3% m/m in December, in line with expectations and higher than November’s +0.2%. Separately, the ISM non-manufacturing index surprisingly felt o 55.9 in December form 57.4 a month ago. This came in weaker than consensus of 57.6. Despite the disappointment, the ISM noted that the majority of respondents indicated that "they finished the year on a positive note”. They also have "optimism for business conditions and the economic outlook going forward".

For the week ahead, China would release its December inflation report on Wednesday. Headline CPI probably accelerated to +1.9% y/y from +1.7% November. PPI might have eased to +4.8% y/y in December from +5.8% in the prior month. This would be followed by the trade data due Friday. China would probably report a narrowing of trade surplus to US$ 37.4B in December from US$ 40.2B a month ago. US would also release its PPI and CPI data on Thursday and Friday respectively. PPI probably eased to +3% y/y in December from +3.1% a month ago, while the core reading improved to +2.5% y/y from +2.4% in November. Headline CPI might have moderated to +2.1% y/y, from +2.2% in November. Core inflation probably stayed unchanged at +1.7% for the month. In the Eurozone, the ECB minutes would be released on Thursday, following a number of confidence data due today.

Commitments of Traders:

With the exception of crude oil, speculators were bullish over the energy complex in the week ended January 2. Net LENGTH for crude oil futures plunged -7 948 contracts from a week ago to 624 213. NET LENGTH of heating oil increased +6 029 contracts to 63 652 while net LENGTH for gasoline added +1 437 contracts to 84 341. Net SHORT for natural gas slumped -28 835 contracts to 141 200 for the week.

Speculators were bullish over the precious metal complex last week. Net LENGTH for gold soared +27 320 contracts to 163 268, while that for silver futures jumped +18 102 contracts to 22 750. For PGMs, net LENGTH for platinum rose +1 102 contracts to 17 415 while that for palladium gained +1 539 contracts to 27 037.


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