NFP, Stocks and EUR/USD; New correlation

Corporate bonds still bid, which should help stock market bulls today, going into NFP.
In fact, unless there is a massive disappointment with todays NFP number, the stock market should remain well bid or rally post it. NFP consensus is at 650K due to mainly a weak ADP report, so NFP will have to come in at 700 plus to change any positive sentiment post it.

New correlation
However, dont expect Eur/Usd to rally due to a higher stock market. For this year, I expect the much talked about and expected capital market rebound to be US centered, ie US stocks and Usd outperforming their European peers. FX markets are still mechanically staying with their yield differential focus. This could support the Eur in the short term, but will sink it as ECB is forced to cut very aggressively during the 1Q. Eventually, we will see 1% or lower. The ECB is hopelessly behind the curve and it is only a short matter of time before it will dawn uponthem. As sure as the Baltic countries will devalue within the next 6 months.

As always, good luck







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