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The bulls are stampeding through the financial markets this morning, after the US Bureau of Labor Statistics reported that the economy generated 214,000 jobs in October,  and revised August and September data to show 31,000 more jobs were created than previously estimated.

These numbers continue to illustrate a wide divergence between the United States and other major economies, and have propelled the dollar higher against most majors ahead of the weekend.

The loonie is also up sharply, after Statistics Canada released numbers showing that more than 43,000 positions were created in the last month in Canada – down slightly from September’s blockbuster report, but perfectly in alignment with expectations.

Canada appears to be managing a clean rebalancing, with manufacturing roles added in proportion to the number lost in the resources sector as prices impact capex budgets.

Across the pond, a game of Russian roulette is playing out in the currency markets. Traders are trying to guess when the increasingly isolated country’s central bank will choose to unload its firepower in an attempt to prevent the currency’s collapse, after it posted a ten-percent decline in less than a week.

Governor Elvira Nabiullina  still has substantial reserves at her disposal, but has been reluctant to intervene – the plunging rouble is helping to offset falling oil prices and boost the country’s trade balance with the rest of the world.  With that said, the  threat of hyperinflation is growing, and continued chaos could force her hand – those with short positions on the currency are treading very carefully.

This drama is injecting instability into most major European financial markets, where investors are increasingly concerned about the broader impact on exports. The euro itself has been affected, coming under pressure as companies with large exposures to former Iron Curtain states sell off, and yields continue to collapse ahead of an expected stimulus programme from Mario Draghi. 1.20 beckons as the next support level, clearly looming in many trader’s sights as the year draws to a close. For the euro, winter is coming…

In our latest podcast, we preview the NFP, run down the ECB, talk about the huge Japanese move, preview the UK and also talk about Brazil:

Download it directly here.

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