Markets expect more jobs data - 7.1.2011

Asian session was flat on Friday. Pair EUR/USD was traded 1.2968-1.3020, USD/JPY – 83.22-83.46. During the asian session the euro fell to its local minimum – 1.2968 against the dollar. However, U.S. markets were mixed. Dow Jones Industrial Average fell yesterday by 0.2%, to 11697.31, while S&P 500 stock index was down to 1273.85 also loosing 0.2%. Crude oil prices fell to settle below $89 a barrel. Gold edged lower to 1364, as a better-than-expected employment report and a stronger dollar weighed on prices.

Despite of better than expected jobs data in the U.S. labor market, there are different opinios about that. Some analists worry that high expectations might excced the reality somewhat, expressing too much optimism in the market, because strong jobs data could de explained by seasonal factors and holidays.

Nevertheless yestarday's weekly jobless claims also confirmed improvements in the labor market, as the rose less than economists expected. Now investors are optimistic about the coming key government nonfarm payrolls report. The official consensus estimate has edged up to 150,000 from 140,000 earlier in the week, while the unemployment rate is expected to fall to 9.7% from 9.8%.

Moreover, Friday gives a wide range of the FED speaches. The President of the Federal Reserve Ben Bernanke speaks to the Senate about the economic outlook and monetary policy. Later regional Fed presidents have conferences in Denver: Minneapolis Fed Chief Kocherlakota participates in a Sovereign Risk discussion and Chicago Fed Chief Charles Evans speaks on a Future of Monetary Policy.

EUR

The european currency has dived to its lowest level against the dollar since November 30 – 1.2968 on Thursday, as the optimism about the U.S. recovery. Continuing concerns about the europea crisis and the U.S. jobs data preset enougth pressure for the european currency. Spanish and Portuguese bond auctions are planned for the next week and investors are currently focused on the upcoming part of the U.S. data. Nevertheless, today's conferences of Trichet, the European Central Bank President, and Barroso, the head of the European Comission represent much interest for investors.