22 Oct 2013
Risk rallies on prospect of continuing Fed support following NFP miss
FXstreet.com (London) - Following the US non-farm payroll miss, equity markets have rallied on the prospect of continuing Federal Reserve support. The S&P is up 0.78 percent while the Dow is up 0.63 percent so far.
According to US Labour Department statistics, non-farm payrolls added just 148,000 workers last month, short of consensus expectations of 180,000. While the unemployment rate dropped 0.1 percent to 7.2 percent, the lowest level since November 2008, the poor headline figure indicates aa slowdown in the US recovery.
The disappointing data has pushed any expectations of the Fed tapering its USD85bn asset purchase programme well into 2013. The earliest date for any relative tightening of Fed policy now looks like March 2014 – after the 7 February US debt ceiling and after Ben Bernanke steps down as Fed chairman on 31 January.
The dollar has come under some heavy selling pressure. EUR/USD is up 0.67 percent to USD1.3773. GBP/USD is up 0.4 percent to USD1.6212. Aussie dollar pairs have been the biggest movers on risk-on rallies, gaining 0.8 percent and 0.85 percent on the dollar and yen respectively.
According to US Labour Department statistics, non-farm payrolls added just 148,000 workers last month, short of consensus expectations of 180,000. While the unemployment rate dropped 0.1 percent to 7.2 percent, the lowest level since November 2008, the poor headline figure indicates aa slowdown in the US recovery.
The disappointing data has pushed any expectations of the Fed tapering its USD85bn asset purchase programme well into 2013. The earliest date for any relative tightening of Fed policy now looks like March 2014 – after the 7 February US debt ceiling and after Ben Bernanke steps down as Fed chairman on 31 January.
The dollar has come under some heavy selling pressure. EUR/USD is up 0.67 percent to USD1.3773. GBP/USD is up 0.4 percent to USD1.6212. Aussie dollar pairs have been the biggest movers on risk-on rallies, gaining 0.8 percent and 0.85 percent on the dollar and yen respectively.