Friday’s Non-Farm payroll figure was pretty dire and signified that the worst is not yet over nor not yet with us. 524k people lost their jobs in December boosting the American unemployment to 7.2%; figures that hadn’t be seen since the end of World War 2. The subsequent risk aversion hammered equity markets and has cast a pall over the Asian open with dollar strengthening across the board.

The US is of course not the only country with employment issues. It has been announced that Gordon Brown is set to outline big measures in order to embolden the labour market into pulling away from the edge. Many economists, this one included, believe that the unemployment figure will slip towards 3m by 2010.

It’s also the beginning of US earning season this week with key figures to watch coming from Alcoa and Intel. Needless to say, all corporate earnings releases at the moment are seen at the lower end of things; we therefore expect the risk aversion to pick up with USD and JPY benefiting in particular.

As a subnote, these updates will soon also be available in video format and a link and instructions will follow towards the end of this week.

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Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice.

Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.