- Nonfarm Payrolls in the US rose by 263,000 in November, the data published by the US Bureau of Labor Statistics revealed on Friday. This reading came in much higher than the market expectation of 200,000. October’s reading got revised higher to 284,000 from 261,000.
- EUR/USD picks up extra selling pressure after the release of the Nonfarm Payrolls showed the US economy added 263K jobs during November, surpassing initial estimates for a gain of 200K jobs.
- It would take less of a surprise we feel for the market to price in less tightening from the FOMC than more. So the bias feels skewed to a weaker Dollar today and a stronger jobs report would have to be impressively stronger to see the US Dollar advance notably.
EURUSD: EUR/USD reflects the market’s cautious mood as it trades near a five-month high near 1.0530 early Friday.
- EUR/USD portrays a typical pre-NFP trading lull at a five-month high.
- ECB President Christine Lagarde cites economic uncertainty, the need for fiscal policy to defend the bloc
- Downbeat comments from IMF’s Georgieva, anxiety ahead of US NFP also probe bulls.
- Hopes of Fed’s slower rate hike, downbeat expectations from US data favor buyers.
USDJPY: The USD/JPY pair remains under some selling pressure for the fifth straight day and drops to its lowest level since August 17 during the early part of the European session on Friday.
- USD/JPY drops to a fresh multi-month low on Friday amid sustained USD selling bias.
- The Fed’s dovish pivot and sliding US bond yields continue to weigh on the greenback.
- Technical selling below the 135.00 mark also contributes to the downward trajectory.
- Oversold conditions on short-term charts could help limit losses ahead of the US NFP.
GBP/USD: The GBP/USD pair consolidates its recent gains to the highest level since June and oscillates in a range, below the 1.2300 mark through the first half of the European session on Friday.
- GBP/USD oscillates in a narrow trading band just below its highest level since June.
- The overnight breakout above the 200-day SMA supports prospects for further gains.
- Bulls, however, prefer to wait for the crucial US NFP report before placing fresh bets.
AUD/USD: The Australian Dollar (AUD) dropped against the US Dollar (USD) following the release of a positive employment report in the United States (US) which showed an increase in wages, pressuring the Federal Reserve (Fed) to take action.
- US November’s Nonfarm Payrolls crushed estimates, and wages rose.
- The US Dollar reclaimed the 105.000 mark, underpinned by high US bond yields.
- RBA’s Lowe: “Australia’s inflation expectations are well anchored.”
USD/CHF: The USD/CHF pares some of its earlier losses or gains in a volatile trading session fueled by a strong November nonfarm payrolls report, which increased the likelihood that the US Federal Reserve (Fed) will continue to raise borrowing costs.
- US Dollar remains weaker, despite upbeat US Nonfarm Payrolls report.
- The USD/CHF hit a daily high following the US NFP headline but plunged in the aftermath.
- USD/CHF: Break below 0.9370 to pave the way to the 0.9300 figure.
S&P500: The risk profile improves during early Thursday as a holiday in the US joins a light calendar. Also keeping the buyers hopeful are the expectations from the Chinese authorities, as well as chatters surrounding the Fed’s pivot and the easy monetary policy.
- Market sentiment remains cautiously optimistic despite the Thanksgiving holiday and light calendar.
- Fed Minutes propelled ‘pivot’ discussions, China brushes aside virus woes to ease zero-covid policy.
- Wall Street closed positive, and US Treasury bond yields refreshed their weekly low.
GOLD: Gold price struggles to find acceptance above a technically significant 200-day Simple Moving Average (SMA) and retreats from a nearly four-month high touched earlier this Friday.
- Gold price retreats sharply from a multi-month top in reaction to upbeat US jobs data.
- Rising US Treasury bond yields prompt aggressive US Dollar short-covering and weigh.
- The risk-off impulse fails to impress bulls or lend support to the safe-haven XAU/USD.
SILVER: Silver price rallied back above $23.00 after the release of an upbeat US jobs report bolstered the US Dollar (USD), while US Treasury bond yields advanced.
- The silver price tumbled to its daily low but rallied to six-month highs at $23.22.
- US Nonfarm Payrolls report smashed estimates through an increase in wages to pressure the Federal Reserve.
- Silver Price Analysis: Upward biased, eyeing $24.00 and beyond.
OIL: WTI extends losses below $80.00 on buoyant US Dollar, China’s Covid woes.
- WTI has accelerated to nearly $81.60 as the Chinese economy is easing Covid-lockdown measures
- A significant decline in the US Dollar has also strengthened oil prices.
- OPEC+ has not announced fresh supply cuts, continuing current cuts till November 2023.
Watch Out This Week
- For starters, on 05th December, USD and GBP PMI will come out a higher than expected figure should be seen as positive (bullish) for the USD & GBP while a lower than expected figure should be seen as negative (bearish) for the USD & GBP..
- Next week, the US economic docket will feature the ISM Non-Manufacturing PMI, Initial Jobless Claims, the Producer Price Index (PPI), and the University of Michigan (UoM) Preliminary release of the Consumer Sentiment.
- On December 8th, the US Jobless claim report will come out. First-time jobless claims significantly impact the financial markets since in contrast to continuous claims data, which monitors the number of people receiving unemployment benefits, first-time jobless claims measure fresh and developing unemployment. A higher-than-expected figure should be seen as negative (bearish) for the USD while a lower-than-expected figure should be seen as positive (bullish) for the USD.
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