Employment Numbers as expected....POOR

The Employment report for December was poor once again. According to the Labor Department 524,000 people lost their jobs last month. That brings the total number of jobs lost in 2008 to 2,589,000. WOW. I consider myself among the lucky ones who still has a seat to go to on a daily basis.

“The labor market has deteriorated sharply, and it’s telling us the economy is exceptionally weak right now,’ said Jim O’Sullivan, senior economist at UBS Securities LLC in Stamford, Connecticut. “The first quarter will be pretty rough again, with big declines in payrolls and higher unemployment.”

Job losses were also widespread, manufacturing, service sector, builders, retailers etc etc all reported job losses.

President-Elect Obama has a number of inititives in the works that I sure hope get this economy moving. Time will tell.

Market Reaction

The Dollar strengthened arcoss the board led by the Euro which traded down to 1.3480(ish). In Latin America the dollar trader stronger most of the day against Mexico and Brazil but on the close reversed course and ended up at its weakest level of the day. I think this has more to do with Latin America then the Dollar. Latin America is setting up for a big lower interest rate move. Chile cut 100bp on Thursday and signaled they had more to come. Mexican Finance Minister said that they were "Very worried about growth". The market took this as a sign of interest rate cuts at the January 16 meeting. Brazilian rates also were off about 20bp as expectations for 75-100bp cut in rates at their Jan 20 meeting are now fully priced in.

I think that Latin American rates might be slightly over done at these levels but will certainly be lower in 3-6 months.

Good Luck and Good Currency Trading.