市场资讯及洞察

Todays NFP figure out of the USA is shaping up to be a pivotal moment in market expectations as to whether we’ve seen peak rates from The Federal Reserve, or if there is more to come and the ramifications that will have for the FX market. NFP figures are always interesting, traditionally the biggest market moving figure of the month on the US calendar, and against the backdrop of the Feds “data dependent” messaging regarding future rate moves this figure will be a big piece of how the market prices in the result of the September Fed meeting. Currently markets are butting heads with the Fed, only pricing in a higher chance of no more hikes from the Fed, despite Fed guidance and dot plots indicating they are looking at least one more hike this cycle.

Current September Fed Fund Future odds are showing only a 17.5% of a hike in the September meeting. Source:CME Fedwatch tool Market expectations are for a slowing in payroll growth in July the consensus being 200k nonfarm payrolls to be added to the US economy in July, slightly cooling from the 209k added in June, with the unemployment rate expected to remain unchanged at 3.6%. A big beat or miss on these expectations, a rapid repricing of hike/hold odds would be likely to see volatility and opportunities in FX markets.

Chart to watch: US Dollar Index (DXY) DXY has rallied strongly since mid-July as the UST 10 Year yields pushed higher and getting an extra boost from some risk-off this week in equity markets which pushed DXY through the S/R level at 102. DXY found resistance at its upper trend line at around the 102.84 level, seeing some of the recent gains being pared. Also an important factor is the close relationship between US10 yields and DXY, the yields now above 4% where they have struggled to go any higher in the recent past, this will also see a headwind against DXY pushing higher from this level.

The levels to watch over todays NFP will be 102.84 to the upside on a big beat, 102 as support to the downside if we get a big miss. Both of those levels will be key in the next trend direction of DXY. Calendar:

The Nasdaq Composite Index has kicked off 2023 with a historic performance, achieving its most impressive start since 1975. Despite concerns about a potential recession, the index has displayed remarkable resilience, surging over 37% year-to-date as of the end of July. The upward trend has been consistent, with green months recorded in 6 out of the 7 months of the year so far.

With only 13.50% more to run before it gets back to all time highs set in November 2021, it will be interesting to watch how this plays out over the second half of the year. From a technical standpoint, traders are closely monitoring the current price action within this crucial resistance zone. The market's reaction here will determine its short-term direction.

Will the resistance zone hold strong and push the price downward, or will the momentum be strong enough to break through and continue its journey toward all-time highs? Zooming out to the weekly timeframe, the Relative Strength Index (RSI) has been floating around overbought territory since mid-June. This confluence with the resistance zone indicates a possible cooling off period in the coming weeks.

This scenario wouldn't be overly surprising, as markets often experience a breather after significant surges.

After a fortnight of trending north, Gold has fallen over the past 5 days. It is currently trading at around $1960, showing a slight decline of approximately 1.35% from its recent high of $1987.53. Price is currently trying to break out of the downward channel that it has been in since late last week, so something to keep an eye on going into the key economic data due out this week.

All eyes are now on the upcoming FOMC meeting, where the market is currently pointing towards a high probability (over 98%) of a 25bps rate hike on Wednesday. Considering the historical inverse relationship between gold and the USD, let's explore potential reactions by Gold to the FOMC meeting: Rate Hike Scenario (USD Strengthens): If the FOMC goes ahead with the 25bps rate hike, it could lead to a strengthening of the USD. Higher interest rates tend to attract more investments into the US currency, potentially dampening demand for gold.

Consequently, gold prices might face downward pressure in this scenario. Rate Pause Scenario (USD Weakens): Conversely, if the Fed decides to maintain interest rates at 5.25% or hints at a more dovish approach, the USD could weaken. A weaker USD often prompts investors to seek refuge in gold as a hedge against currency depreciation and inflation.

As a result, gold prices could see an uptick due to increased demand. Source: CME Fedwatch tool With the markets almost entirely pricing in a 25bps hike, unless we get a surprise in the figure, volatility may stay subdued until Fed Chair Jerome Powell begins his press conference shortly after the announcement. Investors and traders will be eagerly analysing his language to see if there are any hints on future movements by the Fed.

The GBJPY has continued to climb strongly to the upside, since the end of March 2023 and currently trades just below the 183.00 price level. This move higher is driven by a combination of the weakness of the Japanese Yen and renewed strength in the British Pound. The Bank of Japan (BoJ) has begun to sound warning bells regarding potentially excessive moves in the Yen, and markets are speculating about the possibility of intervention from the BoJ.

The previous intervention from the BoJ came when the USDJPY reached the 145 price level. The USDJPY currently trades along the 143.60 price level. This could indicate that further upside could be anticipated on the GBPJPY before a strong correction to the downside.

If the GBPJPY breaks above 183 the price could continue to climb towards the next key resistance level of 188.70, with the Ichimoku cloud providing strong support for the uptrend. As the Relative Strength Index (RSI) is well into the overbought region, watch for a possible reversal if the BoJ intervenes, especially along the 188.70 resistance level or at the major swing high of 195.60 (last reached in June 2015)

USD was firmer on Thursday, largely due to a rally in treasury yields with the DXY tracking the 10 year yield higher to a peak of 102.470 after bouncing off the psychological 102 support level. US data was mixed with Unemployment claims and current account figures coming in worse than expected, but this was offset by a beat in Existing home sales. There was a selection of Fed speakers, with the Chair Powell headlining.

Little new was revealed with Chair Powell re-iterating the FOMC broadly feels it will be appropriate to raise rates again this year which surprised no-one. GBP was volatile after the BoE somewhat surprised markets with a larger than expected 50bp hike, going into the meeting a 25bp was the favoured outcome by economists, but a 50bp was partially priced in so not a totally unexpected move from the BoE. The bank also maintained guidance further tightening would be required if there was more evidence of persistent inflation.

Post decision GBPUSD hit a high of 1.2838 in a knee jerk reaction before reversing the move and eventually hitting lows of 1.2728 in similar price action we saw after Wednesdays hotter than expected CPI figure. GBP price action is indicating the market feels further hawkish re-pricing of BoE action is limited, with fears that the current projected path will lead to recession in the UK weighing on the Pound and Cable will struggle to breach the major resistance at 1.28. CHF was lower vs the USD after seeing weakness in the aftermath of the SNB rate decision where the SNB hiked by 25bps disappointing some market participants who were looking for a 50bp move.

The SNB did note however that additional rate hikes will be necessary. After an initial spike lower to test the 0.8900 support zone, USDCH reversed course, hitting a high of 0.8973 before finding some selling. JPY was the G10 underperformer with USDJPY printing a fresh 2023 high of 143.22 after breaching the key 142.50 level, with a CPI report coming up today, another close above this level could see a technical continuance to test the 145 level.

Recent Fed speak has also raised the issue that US treasury yields are likely to continue to rally, increasing the rate differential between US10Y and JGBs which will also be a major tailwind to get the pair to 145, which is where the BoJ's November USDJPY intervention was launched. Todays calendar of major risk events below:

A raging US equity market fuelled by soft data, a drop in treasury yields and blowout earnings from NVDA (which saw its stock price hit an all-time high) saw risk-on trading through Wednesdays session. USD was choppy on Wednesday with an initial rally in DXY, which saw it briefly pierce the major resistance at 103.60, dramatically reversing course on big misses in US Manufacturing and Services PMIs which showed the US economy contracting faster than forecast. DXY hovering just above lows of 103.30 at the close after the earlier rally (driven by EUR weakness after their own PMIs disappointed) saw a high of 103.980.

AUD and NZD were among G10 outperformers, with AUD benefitting more from the risk-on sentiment outperforming the NZD to see AUDNZD hit a 10 day high of 1.0846. Rallies in iron ore and gold prices also helping the AUD. AUDUSD continued its bounce from the 0.6400 support level to highs of 0.6482, the next key level is the big figure at 0.6500 which until recently had been major support and now likely to be the next resistance level and certainly a key level to watch.

GBP was the G10 underperformer as dire PMI readings saw the Sterling Bears in charge. Services and Manufacturing figures all sharply declined, slipping into contractionary territory. GBPUSD printed a low of 1.2616 after the figures after hitting a high of 1.2717 earlier in the session.

GBPUSD did bounce back to regain the key 1.2700 level in the US session though, recouping most of its losses on positive risk sentiment and the USD slide on its own weak PMI figures. JPY outperformed with tumbling US treasury yields saw rate differentials tighten, taking the pressure off the USDJPY. USDJPY crashed below the key “intervention” level at 145 after printing an earlier high of 145.89.

The Yen was also supported by a beat in Japanese PMI data. The next big data point for Yen watchers will be the Tokyo CPI figure released tomorrow, with the 145 level key to the next move in USDJPY. Gold blasted higher in Wednesday’s session, blowing through the 1902 resistance level and not finding any real selling until 1920, the high set back on 11 th of August.

A weak USD and more importantly catering US Treasury Yields lending a big tailwind to the precious metal. In today’s economic announcements, not much in the way of tier one releases with Jackson Hole looming on Friday. US unemployment claims being the headline.