The big news this morning is U.S. private sector payrolls for January, as reported by ADP. 175,000 jobs were reported to have been added, far less than the 189,000 expected. December’s numbers were also revised downwards by 11,000. This caused gold to immediately spike to $1,275 an ounce, and silver to touch $20.32, before settling down. Platinum is posting modest gains, and palladium is solidly higher.
Stocks in New York opened lower and promptly fell. The dollar, which had been trading flat, was also smacked downwards, but regained its footing. The dollar is weaker versus the yen, which is seeing continued safe haven demand.
The emerging markets crisis has calmed a bit, though they are still seeing heavy outflows. Brazil cancelled its bond sale scheduled for today, citing “market conditions.” Russia has cancelled bond sales for the last two weeks running, for similar reasons.
Euro stocks were up on earnings and factory activity early, but reports that consumer spending for Christmas fell by 1% pared gains. The Nikkei saw a volatile day, but managed to close in the green by 1.2%. Chinese markets are still closed for the Lunar New Year holidays.
German megabank Deutsche Bank, the world’s largest currency trader, announced the firing of three currency traders in its New York office over improprieties in trading. The three had previously been suspended from their duties while an internal investigation was conducted.
Financial regulators in three countries, plus regulators for the European Union, are conducting investigations into currency rate manipulations that affected trillions of dollars worth of trades daily. German regulators have expanded the probe to include manipulation in the gold and silver markets. Their request of records from Deutsche Bank prompted the bank to withdrawn from the London gold fixing process, where they and four other banks set benchmark rates for gold twice a day. Deutche also withdrew from the London silver fix, which was conducted by them and only two other banks. The London Gold Market Fixing Ltd is conducting studies on how to modernize and increase transparency in the benchmarking process, which began in 1919.