NY Open: Sketchy details undermine dazzling NFP gains
FX Trader, Loonieviews.net
Summary: The latest nonfarm payrolls release out of the US features a stunning headline figure and some more troubling data on the unemployment front. The result has been a notable lack of the dollar rally such a print would ordinarily spark.
The Fed expects US employment to stay strong, making the job gains a secondary consideration. It ismore concerned about the stubbornly low rate of inflation. The lack of wage inflation, evident in the average hourly earnings component, validates the Fed’s decision to hit the pause button on rates. The greenback recovered a bit after Michigan Consumer Sentiment, and ISM Manufacturing PMI were higher than forecast.
USDCAD continues to chew through layers of support. It took out the 200-day moving average at 1.3225, and the 61.8% Fibonacci retracement level of the October to January range at 1.3115. A break below support of 1.3050 would lead to a test of uptrend support at 1.2990. Firm oil prices, a dovish Fed and expectations for a rebound in GDP growth in December are pressuring the downside.
Wall Street opened a tad shaky. Traders aren’t sure if they should be selling because of Amazon (AMNZ: Nasdaq) predicted slowing growth after announcing record sales over the holidays or if they should be buying because the Fed refilled the easy-money punch bowl. Amazon concerns may win the day. The stock is down 4.20% as of 14:00 GMT, and that may encourage traders to lock in some gains earned this week.
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.
Technical Outlook: Gold, Oil and a remarkable multi-decade perspective on EquitiesThe Nasdaq bubble pattern, USDJPY resistance, crude oil uptrend losing steam and the technical outlook for USD.
China: the train of new development paradigm left the station two years agoChina is transiting to a new development paradigm, as they are hit by deteriorating terms of trade, a slower global economy and an uncertain future while continuing attempts to contain the pandemic.