USD: A red start for the Dollar, ECB in Focus
Dec-12 07:30
- The Dollar was on the backfoot overnight, in the red across G10s, only the Yen was closer to flat going into the European session.
- While we just noted the rise in Yields, the Dollar is seeing broader downside making intraday lows against the SGD, CZK, AUD, MXN, PLN, THB, EUR, GBP, ZAR, NOK, SEK, CHF, seems the latest China headline's willingness to increase trade talks with the US has provided some impetus in the move, albeit still very limited in the grand scheme of things.
- The notable mover and the leader within G10s is the Aussie, following the Employment beat, and while AUDUSD is back above 0.6400, it is some way short of Monday's high of 0.6471.
- The most traded pair in the World continues to stick close to that 1.0500/1.0600 range, and as mentioned this Week, there's plenty of decent size Option expiries this Week and into Monday, some Desks seems to be looking for the EURUSD to end within that range at Year end, but the ECB will be the shorter term driver, Today.
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UK DATA: Labour market data broadly in line with expectations
Nov-12 07:29
- Looking at private regular AWE in more detail: There was an upward revision to the single month reading for August from 4.51%Y/Y to 4.59%Y/Y (leading to the 3-months to August being revised up marginally from 4.83%Y/Y from 4.81%Y/Y). The September single month print came in at 4.89%Y/Y - which with the exception of the low August print, is the lowest Y/Y single month reading since April 2022 - but more in line with the readings seen between May-July which were between 4.94-4.98%Y/Y. Looking at this individual cohort, however, there is very little progress here. On the comparable single month figures We have moved from 4.98%Y/Y in June to 4.89%Y/Y in September over a 3-month period.
- Looking at private AWE in a couple of different ways: in M/M terms (which we don't like because you are comparing different cohorts), the reading is 0.47% - the highest since April. But looking at momentum (3m/3m) it has fallen to 4.21% annualised in September from 4.71% in August, and the lowest since January.
- So there is something for everyone in the private AWE data here. The BOE forecast for the 3-months to September was 4.75%Y/Y - so today's print was 0.14ppt higher than expected. That's not really a huge deviation.
- The total pay numbers and public sector pay numbers we don't pay too much attention to here - they are skewed by one-off payments and don't really give much predictive power.
- On the unemployment side, there was very little in terms of revisions. The number of 16+ unemployed jumped by 100k from 1.386mln to 1.486mln while the total number in employment fell by 59k. This increased the unemployment rate to 4.27% from 3.99% without a change in the economic inactivity rate. But given the issues with the LFS survey - this could well be a spurious move.
- So to sum up - wage data marginally stronger, quantities data marginally weaker, but this shouldn't really change anyone's voting intentions.
GOLD TECHS: Has Cleared The 50-Day EMA
Nov-12 07:28
- RES 4: $2814.7- 3.618 proj of the Jul 25 - Aug 2 - Aug 5 price swing
- RES 3: $2800.0 - Round number resistance
- RES 2: $2790.1 - High Oct 31 and the bull trigger
- RES 1: $2699.1/2750.0 - 20-day EMA / High Nov 5
- PRICE: $2603.8 @ 07:27 GMT Nov 12
- SUP 1: $2584.9 - Low Sep 20
- SUP 2: $2547.0 - Low Sep18
- SUP 3: $2531.8 - High Aug 20
- SUP 4: $2492.0 - Low Sep 2
The trend condition in Gold is unchanged, it remains bullish and the latest pullback appears corrective. However, recent weakness has resulted in a breach of the 20-day EMA, and yesterday’s sell-off delivered a print below the 50-day EMA, at $2646.3. The breach signals scope for a deeper retracement towards $2547.0 the Sep 18 low. Firm resistance is seen at $2699.1, the 20-day EMA. Clearance of this average is required to signal a reversal.
BUNDS: Trades near Yesterday's top range
Nov-12 07:19
- Bund has edged back towards Yesterday's top of the range, but still short of the initial resistance seen at 132.73.
- The UK Data was mixed and provided a small 14 ticks swing in the Bund, initially gaining, to now trade below pre Data level, but still in a tight 20 ticks range.
- Small support in Bund moves up to 132.15, and this will be followed by the 2.50% level in Yield.
- With the UK Employment Data out of the way, only the German ZEW remains in terms of notable Data out of Europe.
- For the US, NY 1yr inflation expectation is due, but the main focus is on the US CPI Tomorrow.
- SUPPLY: Netherlands €2.5bn 2029 (would equate to 19k Bobl), UK £2.25bn 2043 (equates to 26.6k Gilt) could weigh, German €5bn Schatz (equates to 52.5k Schatz) should weigh into the bidding deadline.
- SPEAKERS: ECB Holzmann, Centeno, Rehn, Cipollone, BoE Pill, Fed Waller (x2), Barkin (x2), Kashkari.
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