Market Comment: February 3

Good morning,

Equity futures are pointing towards a 1% gain on the opening bell following much better than expected US non-farm payroll data.

Non-farm payrolls jumped 243K, miles ahead of the expected 150K release, with the largest gains in professional and business services, hospitality and manufacturing.  This saw the US unemployment rate drop to 8.3% to 8.5%; however, the devil is in the details: the labour force participation rate fell to a 30-year low as 1.2 million people dropped out of the labour force in January alone.

Canadian data was worse than expected; the Canadian economy added 2300 jobs in January, 90% less than analysts had predicted (23.3K).  As a result, the unemployment rate rose to a 9-month high of 7.6%.  The Canadian dollar remains tightly range-bound against the USD as no major news out of Europe and positive US data is feeding investor risk appetite.

Greek Finance Minister Venizelos has called on Greece’s official creditors (ECB & national central banks) to participate in the debt restructuring (read: haircut & massive losses).  German Finance Minister thought better of this, announcing in a TV interview “It does not need an additional contribution from the public sector because we’re shouldering everything anyway.”  Same old story – more politicking with no changes on the horizon for the time being.  The USD and CAD rose sharply against the Euro following the positive NFP data from the US with both pairs up one-cent overnight.

North American equity futures are up 1%, Europe has gained 0ver 1% while the Nikkei is up 0.70%.  Crude Oil has gained 0.5% to $96.85 while Gold has softened marginally, down 0.3% to $1,755/oz.