Pivotfarm Daily News Harvest 6th August 2010

Markets in a Flash

·        
The JPY has started to look
strong over the past few hours gaining against the USD and other currencies.

·        
The USD is also looking strong
against other currencies, this may as investor buy the greenback before the US’s employment
report.

·        
US equity futures have been
fluctuating this morning but are currently posting slight gains ahead of the US session.

·        
Most commodities are lower
today ahead of the US
employment data.

·        
Sugar has pushed higher along
with some other soft commodities because of the drought in Russia.

·        
Overnight stocks in China closed higher, a strong session left the Shanghai index closed up
+1.44%.

·        
The Hong Kong Hang Seng index
closed its session posting gains of +0.59%

·        
European equity markets are
pushing higher this morning. The Stoxx 600 is up and has posted a new high
since April 26.

News focus

Focused on Jobs data

The main news
focus for today’s trading session is the Employment data just released. This
should be guiding the US
equity markets and the strength of the USD in the FX markets.

AIG reports a quarterly loss

AIG, American
International Group, which is almost 80% owned by the US taxpayer has
reported that it has made a $2.7Bn net loss in Q2 of this year. This large loss
can be mainly put down to the company having a $3.3Bn goodwill impairment. The
company reported an adjusted profit figure which is up from last year and has
seen the share price rise 5.3% in pre-market trading.

Just Released

0830ET – Employment Data

Nonfarm
Payrolls - M/M change

Previous              -125,000               Consensus
Range            -150,000 to 0 

Consensus          -70,000                 Actual                                   -131,000 

Unemployment Rate – Level

Previous              9.5 %                     Consensus Range            9.3 % to 9.7%

Consensus          9.6 %                     Actual                                   9.5 %

Non-farm payrolls came in worse than
consensus suggested with a larger drop than was reported last month. This drop
in non-farm payrolls of -131,000 shows that the US labour market is in worse health
than previously thought, this may show that the economic recovery is struggling
in the worlds largest economy. This is very bearish for the markets today and
should send the equity markets negative.

Coming up Today

1500ET – Consumer Credit -
M/M change

Previous                              $-9.1Bn                                 Consensus          $-5.0Bn

Consensus Range            $-10.0Bn to $7.0Bn

Consumer credit is a measure of how much
debt consumers have. A rising level of debt may be fine if economic conditions
are improving as consumers will be able to repay their debt, but if the economy
is declining then servicing debt may become harder. The figure last showed a
$-9.1Bn decrease in consumer credit for May which is expected to be followed
with a further decrease for June.

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