NEWS TRADING

Wednesday September 30, 2009

[8:15am NY Time]

US ADP NFP Changes BUY -130K SELL -270K USD/JPY

ADP is probably the largest payroll processing providers in the
world, and it releases its version of Non-Farm Payroll numbers,
based on the private job's sector, 2 days (sometimes one day) ahead
of the official government Non-Farm Payroll release. This release
is usually about 80% accurate to that of the official NFP. But the
for the 20% of the time when it was inaccurate, its figures were
totally off. This is a good news item to watch out for the general
directional of the market and serves as a preview of the NFP on
Friday; if the numbers comes out at least 70K more or less of the
Forecast -200K, then we will look to take a trade with the best
looking currency pair.

As I usually don't expect to trade the ADP figure but rather use
this release as a reference, I would assume that most investors are
likely to do the same; however, if the deviation of 70K is actually
hit, true speculators will probably have not problem taking
advantage of the volatility.

Also keep in mind the conflict between the risk sentiment and
fundamental outlook of U.S. economy as investors focus on this
release for a clue on Friday's NFP... the impact of this report may be
exaggerated.

[8:30am NY Time]

CA GDP m/m SELL 0.7% BUY 0.1% USD/CAD

We'll be trading the Canadian Gross Domestic Product (GDP) month on
month figure, which is defined (from wikipedia) as "the market value
of all final goods and services produced within a country in a given
period of time. It is also considered the sum of value added at
every stage of production of all final goods and services produced
within a country in a given period of time." GDP number has a direct
and strong effect on the Interest rate of the currency, and it
affects BOC's short-term rate decision directly.

We are looking for a +0.7% or better or a 0.1% or worse release on
the expected 0.4%. If we get a 0.7% on the monthly GDP, it would be
somewhat CA Dollar positive. We will SELL USD/CAD, and if we get a
0.1% release, then we would be BUYING USD/CAD.

Canadian Dollar has been under pressure with Crude Oil prices also
consolidating from its recent highs. My long term view on the
USD/CAD pair is definitely above the 1.1000 level, and at the
current 1.0800 area, we are already at a heavy overbought area.
Therefore, if CA GDP shows signs of weakness, it could spark another
wave of CAD sell-offs.