News & Analysis
Dow, S&P continue to run pre-employment data; JPY overnight recovery; GBP new lows as Brexit pain continues.
Major economic data releases for today:
▸ 23:30 AEST – CAD Employment Change; CAD Unemployment Rate; USD Average Hourly Earnings; USD Non-Farm Employment Changed; USD Unemployment Rate
▸ Bank Holiday in China
US shares continued on their way last night. The Dow Jones added 113 points; the S&P500 added 14.33 points as more good news emerges from the US. The house of representatives has approved the budget and Trump’s tax plan seems to be edging closer. More positive jobs data combined with a big miss for the Canadian trade balance propelled the USDCAD back above 1.2550 levels, figures not seen since August. Interest rate talk continues to point to a rise in December. Jobs data this week has looked healthy so tonight’s non-farm employment figures could beat expectations. The market is looking for 82K and unemployment to remain at 4.4%.
Optimism is close to fever pitch in the US at the moment with a lot of talk about this current bull going for a further 6 years. History has taught us that nothing lasts forever and at some point markets turn. Let’s hope for the sake of continued good times positive data continues to come out.
Apart from the USD creaming the CAD, we also had two other big currency moves last night. The JPY jumped post Bank of Japan and Prime Mister Abe’s comments. Inflation and interest rate comments look to be the driver for the Yen and we saw solid falls on the AUDJPY, EURJPY and GBPJPY.
Brexit continues to haunt the GBP with new lows for Sterling overnight and continued worries about the UK economy post-Brexit drove the GBP lower.
Meanwhile, OIL jumped overnight adding two percent boosted by a potential OPEC deal.
Today, we’ve also seen gains on the local ASX200 +42 and Nikkei +50. The poor Aussie has been back under the seller’s button as the RBA has not ruled out further rate cuts. Things have turned very quickly for the AUD indeed. Today, AUDUSD -32 pips AUDJPY -33 pips.
Please keep in mind key US jobs data due out later tonight and normally markets slow down as the release approaches.
US30 – since Trump took office, we’ve seen a gain of 4207 points for one main correction of 837 points.
GBPJPY – fast eight hours of selling that saw the G/J lose 159 pips. Currently price is consolidating into a continuation pattern. With all continuation patterns confirmation is required. 147.66 current low.
USOUSD – support developed yesterday with divergence and it was a short term low. Lots of traders may be blindsided by this move as it was driven off a potential OPEC deal.