US Non-Farm Employment Change disappoints at -125,000, turning negative once again and worse than forecast. The Unemployment Rate improved to 9.5 percent due to a smaller labor force.

The Forex market was not significantly moved by the news. US equities were flat on the open, but now negative for the day.

Private employers added fewer workers to payrolls in June than forecast, reinforcing concerns the recovery will weaken as Americans curtail spending.

Employment at companies rose 83,000, less than the 110,000 gain forecast by economists in a Bloomberg News survey. Including government, payrolls fell for the first time this year because of a drop in federal census workers. The jobless rate dropped to 9.5 percent from 9.7 percent as the labor force shrank, the Labor Department reported today in Washington.

Read the full article on Bloomberg.com
U.S. Economy: Private Payrolls Grew Less Than Forecast in June

Bernanke is still fully committed to providing stimulus and bailouts, even internationally. The world has yet to learn that the cure for too much debt and spending is not more debt and spending. Look for this behavior to continue and drag on the value of the US dollar in the long term.

June 9 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank will act as needed to aid financial stability and economic growth after restarting emergency currency-swaps to help contain Europe’s debt crisis.

“Our ongoing international cooperation sends an important signal to global financial markets that we will take the actions necessary to ensure stability and continued economic recovery,” Bernanke said today in testimony to a House Budget Committee hearing.

Read the full article on Bloomberg.com
Bernanke Says Fed to Take Necessary Steps on Growth

EURUSD has reached a new weekly low, slightly surpassing yesterday’s low of 1.2176. The next short term support level is the low from May 19, at 1.2142. Look to sell EURUSD on a break of support. Or for those who are more range traders, wait for a rally to sell EURUSD at a better price.

May 26 (Bloomberg) — U.S. stocks fell as reports China may consider reducing investments in European government bonds spurred concern the credit crisis will worsen, wiping out an early rally triggered by better-than-estimated economic data.

Read the full article on Bloomberg.com
U.S. Stocks Tumble on Concern China May Reduce Euro Investments

The Greek bailout is now underway and the Euro is continuing to weaken. EURUSD is now at its lowest point since 2006. EURJPY’s low for this month marked its lowest point since 2001. Gold has also recently set all time highs priced in Euros.

While much of the decline has already occurred, never underestimate trends in the Forex market. Look to sell the EUR on rallies. EURUSD and EURJPY are likely to be the big movers in times of Euro weakness, but keep an eye on EURGBP as well. It’s likely to see more ranging action, which may fit your trading style better. Look for tops forming resistance, e.g. near 0.8600, and sell EURGBP off bounces of that resistance.

Greece has received the first tranche of a 110bn-euro ($136bn; £94bn) loan to help it overcome its debt crisis, the European Union has said.

The European Commission said 20bn euros from the EU and the International Monetary Fund had been drawn on.

Read the full article on BBC
Greece receives first tranche of EU bail-out loan

Excellent fundamental analysis of the financial troubles and bailouts in Europe.

The recently approved eurozone bailout package, designed to buy more time for fiscally troubled nations such as Greece, Spain, and Portugal, is nothing short of a global Greek tragedy in the making. Of course, quite contrary to this, judging by the response of global stock markets, one would get the impression that happy times are around the corner. However, those of us who understand Austrian economics and believe in free markets and sound currencies can see one more nail driven into the coffin of paper fiat currencies such as the euro, US dollar, British pound, and Japanese yen.

Read the full article on Mises.org
A Greek Tragedy in the Making

Listen to Peter Schiff explain why the bailout in Greece is an American style bailout and what this means for the Euro and US dollar.

YouTube.com – Peter Schiff: Bailout American Style

These bailouts create moral hazard and malinvestment. While they may bolster demand and confidence in the short term, it is a long term problem that will weaken their respective economies and currencies.

With so many central banks engaging in bailouts and resorting to inflating the money supply, look to buy the currencies of the ones doing it less. At this moment, that would be the Reserve Bank of Australia, which has the highest interest rate of the major currencies. The AUD is by no means guaranteed to go up smoothly, but in the long term, look to buy AUDUSD on dips or look to sell EURAUD on rallies.

The Forex market has made significant moves as well. Risk aversion has strengthened the USD and the JPY. EURUSD and GBPUSD hit new lows for 2010. GBPJPY, a very volatile pair, dropped over 1,000 pips today.

Yet the USD is not the safe haven it once was, as gold soared against the USD. It is once again over the 1,200 mark.

In moments of risk aversion, look to buy the USD or JPY against higher yielding pairs. Do not underestimate potential moves and be sure to practice sound risk management.

(Reuters) – U.S. stocks were down more than 3 percent on Thursday afternoon after briefly nosediving, with the Nasdaq at one point down more than 9 percent and the S&P 500 and Dow briefly falling into negative territory for the year, as worries about contagion from Greece’s debt problems mounted.

Read the full article on Reuters.com
Indexes down 3 percent after plunging

The appointment of three Federal Reserve governors today is significant, but the impact will be minor since they fall in line with the current board of governors. Senate confirmation is still required for the appointees.

“This will be a group of doves slanted toward job creation and growth, increasing the likelihood of rates staying low for a long time,” said former Atlanta Fed research director Robert Eisenbeis, now chief monetary economist at Cumberland Advisors Inc. in Vineland, New Jersey.

These appointments show the president’s desire for continued easy monetary policy, which also enables irresponsible fiscal policy. Unfortunately artificially depressing interest rates causes distortions in the economy and leads to malinvestment. It is what caused the housing and financial bubbles, and the Fed seems determined to create another to replace them.

I remain unconvinced that the Federal Reserve, who caused the bubble and got everything wrong until after it burst somehow has the answer to unwind the unprecedented levels of stimulus and their massive toxic balance sheet. So today’s news helps further support the long term assessment for holding interest rates low for an extended period and USD weakness.

April 29 (Bloomberg) — President Barack Obama’s appointment of three Federal Reserve governors will bring the board to full strength for the first time in four years, helping Chairman Ben S. Bernanke manage a withdrawal of record monetary stimulus and an overhaul of bank supervision.

Read the full article on Bloomberg.com
Obama Fed Picks to Help Bernanke Manage Stimulus End

Risk aversion on the news has driven people into USD and JPY, which have strengthened against all major currencies. EURUSD reached 1.3210, almost making a new monthly and yearly low. We have begun to see a stalling out and small bounce from the move, but this is a large long term problem and is likely to continue to weigh on the Euro.

April 27 (Bloomberg) — Greece’s credit rating was cut three steps to junk by Standard and Poor’s, the first time that’s happened to a euro member since the currency started, as contagion from the nation’s debt crisis spread through the bloc.

Read the full article on Bloomberg.com
Greece Cut to Junk at S&P as Contagion Spreads Through Europe

With the Federal Reserve ending its 15-month $1.25 trillion mortgage bond buying binge on Wednesday, delinquent loan buyouts by Fannie Mae and Freddie Mac could serve as the saving grace for the $5 trillion agency mortgage-backed securities market.

The paydowns from these buyouts will put billions into the hands of mortgage investors for reinvestment and significantly reduce supply, mitigating the massive void the central bank will leave behind and helping keep yield spreads near record tights.

Read the full article on Reuters.com
Fannie, Freddie may fill Fed void in mortgage market