Trading Video: NFPs Falls Short of Decisive Risk Catalyst
• The US December labor report presented a mixed picture with 6.5 year low jobless rate and wage rate drop
• While the Dusk of US stimulus may ultimately contribute to a risk reversal, it isn't offering a 'trigger'
The tension is palpable for the global financial markets, but a true capitulation to risk aversion continues elude us. A rise in activity levels, early trouble in riskier markets and a foundation of investment based on low volatility and desperate need for yield offer a backdrop of fragility. What's missing is the spark that makes a correction a matter of necessary repositioning as losses mount. Both the troubling start to the New Year and US NFPs presented an opportunity to 'trigger' the sentiment shift. However, volatilitiy has yet to explode despite sizable market swings and the labor data walked the line between top line improvement and dubious underlying languor. Ahead, it is critical to keep a wary eye on the progress in risk trends, but there is also event risk to keep monetary policy an activity theme as well. In the weekend Trading Video, we look at our key market drivers and the pairs best positioned for meaningful developments.
Sign up for John’s email distribution list, here.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.