Dollar Gain Against Euro on Jobs Outlook - hope Friday shows +200,000

[papau]

http://quote.bloomberg.com/apps/news?pid=10000103&sid=aINLFsOubwT4&refer=news_index

Dollar Has Biggest Gain in a Year Against Euro on Jobs Outlook

March 2 (Bloomberg) -- The dollar had its biggest rally against the euro in a year, and surged to a four-month high against the yen, on speculation employment growth in the world's largest economy is accelerating.

Federal Reserve officials have indicated they will wait for the economy to create more jobs before raising their target interest rate from 1 percent. Higher U.S. yields may draw foreign investors. A manufacturing report yesterday showed factory employment at the highest since 1987. <snip>

The U.S. probably added 130,000 non-farm jobs last month, according to the median estimate of 63 economists surveyed by Bloomberg News. About 112,000 jobs were created in January. <snip>

The economy may have only added 100,000 jobs last month, said Durrant. Labor growth below consensus, combined with lack of movement on interest rates by the ECB this week, may squelch the dollar's rally, though an addition of 200,000 jobs would spell further dollar gains, he said. <snip>

[rapier]

1. notes

The "jobs outlook' had nothing to do with the dollars move today. All such one line resaons for market moves are BS. They make for a nice simple story but they are meaningless.

If you believe that any market moved because of one thing, the thing headline writers say, you are being spun.

Want proof. The stock market was very weak today. The reason given by the NYTimes, 'because investors took profits" Shouldn't stocks have risen on the positive jobs news? Of course not. The stock market today, like all markets moved on its own internal balance of buyers and sellers and money flowing into and out of it. The jobs news would have been the headline reason for the market to rise today if the stock market had risen today, but it didn't, it fell, so they picked the 'profit taking' story. An old reliable one which serves the additional purpose of reinforcing in an offhand way the most important story of all with which to propoganize the public. That stocks are profitable.

It's just a STORY.

For a very very long time a story about stocks was that if the dollar weakened then stocks would fall. Funny thing is that since the dollar began its long relentless slide in early 2003 stocks have been rising. Today the dollar soared, and stocks fell. I am not proposing that there is a correlation, that the dollars rise 'caused' stocks to fall. Saying that would be falling into the trap I just suggested. THe point is that no story explains why markets move.

Stories, stories, always stories, Don't mean a thing but people have to say something.

[yella_dawg]

2. NPR did a somewhat lighthearted "expose" of the phrase "profit taking"

a while back. One fellow they interviewed pointed out that the purpose of the stock market is profit, thus any stock sale could be considered in the realm of "profit taking".

The thrust of the story was that "profit taking" actually means "Who knows?" Which, of course, is obvious.

[German-Lefty]

7. I like to use the term "loss taking"

when a market bounces a little after falling. :-)

[54anickel]

3. Stock market and jobs -

You'd think they'd be happy with a good jobs report, but the spin given is always that a good outlook on jobs means interest rates may move up soon. In one way they are correct, Greenspin really can't raise interest rates without a huge risk to the side of rampant defaults and asset deflation, starting with the jittery stock market.

[rapier]

5. notes

Grasping at straws. That is what the positive spin put on this single component of some report was. THEY ALWAYS TRY TO SPIN A POSITIVE TALE FROM STATISTICS. It's a growth industry.

I call it bullhorning. It is propoganda.

[54anickel]

4. It makes a good story anyway. The currency traders don't really care

about the job outlook beyond the fact that it may cause Greenspan to raise interests.
According to this article, the BoJ was trying to spook out the dollar short positions.

http://www.fxstreet.com/nou/content/102055/content.asp?menu=market&dia=232004

snip>
There has been further evidence of Bank of Japan support for the dollar. This continues to suggest that the central bank stance has shifted and that it is trying to force short dollar positions out of the market rather than just preventing further yen gains. The authorities want to lessen the risk that the dollar will face renewed downward pressure in the near term and there is the risk that dollar short positions will be reduced further which could push the US currency towards the 112.0 level.

The medium-term outlook still suggests that the yen will strengthen and a move to 112.0 would offer some value in long yen positions.

[rapier]

6. currencies are junk

All curreincies are now crap.

Now Al says Japans interention is problematical. What a slimy weasel. They have saved his ass. He gets all righteous suddenly about pure markets. What a joke.