The US is expected to release its jobs numbers in two reports tomorrow 10 January 2014. The first report is the Change in Non-Farm payrolls while the other concerns the Unemployment rate. At this time, many experts believe that while the economy succeeded in adding an impressive number of jobs to the workforce, the overall effect is unlikely to result in a lower rate of unemployment.
Analysts point to the fact that the employment figures have robustly rebounded in recent months, with nearly 203,000 jobs added during the month of November 2013. As it stands, the unemployment rate is now at its lowest point in over five years. As such, the improved employment figures are helping to spur both the economy and boost up the USD. It was reported today 9 January 2014 that the dollar had reached a four month high and was beating out most of its rival currencies. Moreover, there is increased optimism that should the job numbers continue to show promise, then the Federal Reserve may look to make further cuts to the stimulus package.
Traders are advised to watch for spikes in the USD following the release of these reports.
Canadian Job Numbers to be Announced Friday
Following their neighbors to the south, Canada is set to declare their own employment figures tomorrow 10 January 2014. As with the US, the two reports will focus on the Net Change in Employment and the Unemployment Rate. Currently, many experts do not expect to see a shift in the rate of unemployment despite the fact that fewer jobs are thought to have been added during the month of December 2013.
Analysts note that the Canadian report regarding the change in employment unlike the American one does not take into account more seasonal positions such as agriculture. Many economists prefer to judge the figures based on the non-farm payrolls as they are less subject to the volatility of the seasons and can be compared from month to month.
It should also be noted that the Canadian economy has had a series of ups and downs as it relates to the close correlation between the loonie and the oil production industry. As the prices of oil have shifted based on estimations of the US stockpiles, the Canadian economy which employs the oil workers has felt the effects.
Traders are advised to watch for changes in the value of the loonie in trading following the release of these reports.
WTI Drops on Reversal of Predictions
It was reported on 9 January 2014 that the price of oil at the West Texas Intermediate energy market had fallen off sharply to a six week low following the release of a government report showing that the US stockpiles were at levels far above previous expectations.
The report was issued by the Energy Information Administration, the US government`s office responsible for measuring data related to the supply of energy resources to the world`s largest consumer. Analysts note that prior to the release of the report, many experts had believed that the reserves had fallen significantly, thus pushing up the demand. However, after this reversal showing increased supply, the demand and higher prices have dropped off.
Analysts also note that in addition to the high levels of supplies, African oil producer Libya is reported to have increased its production significantly, helping to add more crude into an already packed market.
Traders are advised to watch for a drop in the price of crude over the coming days as the market reacts to this change of direction.