NEW ZEALAND: BNZ/SEEK Employment Report: Deconstructing
BNZ note that "far from being an aberration, the 8.3% drop in November’s job ads proved to be a pretty good pointer to further weakness in December. Job ads fell 6.3% in the final month of 2022. This took the cumulative fall over the last four months to around 20%, based on the seasonally adjusted series. It’s been a similar sized drop in trend terms. This measure also marked jobs ads, in December 2022, at about 20% above their 2019 average, whereas in mid-2022 they were running around 40% higher than that pre-COVID point of reference. It’s been quite the cooling. Indeed, tracking the trend forward, jobs ads could be back down to pre-COVID levels by the middle of 2023."
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JPY: USD/JPY Close To Month To Date Highs
The yen was the weakest performer within G10 FX at the start of the week. USD/JPY finished around 0.80% higher for Monday's session, putting the pair back at 137.70. Overnight highs came in at 137.85, near month to date highs. A firmer US cash Tsy yield backdrop, which extended gains from Friday's session, weighed on the yen and supported the USD more broadly.
- The short-term outlook is bullish, and a corrective cycle remains in play, following the recovery from 133.63, the Dec 2 low. This phase has allowed an oversold trend condition to unwind.
- An extension higher would open 138.70, the 20-day EMA. This average marks the first key short-term resistance.
- The main event risk is tonight's US CPI print. Locally, the data calendar is empty today.
- The authorities are reportedly considering introducing a minimum tax rate on incomes of 3b yen, although such a proposal wouldn't be implemented until 2025.
NZD: Higher US Yields Support Greenback, Food Prices On Tap
NZD/USD prints $0.6383, down ~0.4% in yesterday's trading.
- The pair firmed in the European session yesterday, retesting Fridays highs before meeting resistance at $0.6420. US Treasury yields rose spilling over into USD strength, NZD/USD had a peak to trough fall of ~0.9% before finding support at $0.6370 and recovering to deal at current levels.
- US Equities advanced, the S&P500 was ~1.4% firmer and the NASDAQ 100 rose ~1.2%, and the DXY finished up ~0.2%.
- REINZ Nov House Sales YoY printed early this morning at -36.1% vs -34.7% prior.
- Technically, bulls look to target the high from 12 Aug at $0.6468, a break through there would open the way to the high from 3 June at $0.6576. Bears need to breach the 20-day EMA at $0.6251 to re-establish the downtrend.
- On the wires shortly we have Nov Food Prices MoM, the prior reading was 0.8%.
AUD: AUD Underperforms Overnight, Watch For Aussie Survey Data Today
MNI (Australia) - The AUD underperformed the rest of the G10, except Japan, against the USD as metal prices fell. The DXY rose 0.2% over yesterday as UST yields increased ahead of the CPI and Fed. AUDUSD has started the day around 0.6750 after reaching a high on Monday of 0.6805.
- AUDNZD continued its downtrend and is now at 1.0572. After range trading through the day AUDJPY rose to 92.96 overnight. AUD lost 0.7% against the EUR and GBP to be about 0.6407 and 0.5501 respectively.
- Despite the drop in AUD yesterday, the trend condition for AUDUSD remains bullish. It has been trading above the key support of 0.6635, the 50-day EMA. If it broke this support then the trend would turn bearish.
- Equity markets were mixed overnight with the S&P 500 closing up 1.2% but the Eurostoxx down 0.5%. Oil prices were higher on the closure of the Keystone pipeline which connects oil fields in Canada to US refiners. WTI rose 3.5% and is now around $73.50/bbl. Copper prices were down 1.8% as the USD rose and also on the possibility that rising Covid cases in China could disrupt activity. Iron ore also eased to $108.70.
- This morning there is CBA household spending intentions for November, December Westpac consumer confidence and NAB business conditions/confidence for November. Tonight US CPI for November prints.
