GOLD: Gold Continues Uptrend On Expected December Fed Cut
Gold prices were 0.8% higher at $4162.16/oz to be up 4% in November and are around $4163.3 at the start of Thursday. They are up 2.4% just this week driven by increased December Fed rate cut pricing and a weaker US dollar. The OIS market now has 22bp priced in and the USD BBDXY fell 0.3% to be down 0.5% this week.
- 22 November jobless claims moderated slightly driving a 1k drop in the 4-week average and suggesting that the unemployment rate is unlikely to rise this month. Delayed September durables were stronger than expected but the November MNI Chicago PMI fell to 36.3, the lowest since May 2024.
- Bullion reached $4173.42 on Wednesday remaining below initial resistance at $4245.2, 13 November high. Technicals suggest that its dominant trend is upwards. Initial support is at the 50-day EMA at $3966.8.
- Silver rallied 3.7% to $53.36 to be almost 10% higher in November. It reached $53.393 on Wednesday, approaching the bull trigger at $54.480. It has started today around $53.31.
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JGBS: Futures Supported Under 136.00, 30yr Yields Supported At 100-day EMA
JGB futures couldn't sustain sub 136.00 levels, ending the post Tokyo close on Monday at 136.13, +.17. For JGBs, familiar ranges continue to prevail, we are well short of key upside resistance, (137.3, the Sep 8 high), while dips under 136.00 remain supported for now. Support yesterday came from a firmer US Tsy futures backdrop, with the 10yr ticking up as Monday's session unfolded, fading the earlier risk on induced dip. The continued government shut down, along with reported job cuts at Amazon (30k per Rtrs) likely aided US Tsy sentiment.
- The data calendar is empty today, with focus to be on US-Japan meetings, with Trump expected to meet new Japan PM Takaichi. Japan's investment pledge to the US will be in focus, with earlier headlines from the US's Lutnick suggesting the first such area for investment would be power (per Nikkei/BBG).
- Late yesterday, US Tsy Secretary Bessent met with new Japan FinMin Katayama - "Bessent told Katayama that “Sanaenomics” seems to be working well and sending a very positive signal, according to Katayama.", via BBG (with reference to Japan stocks gains). New PM Takaichi's approval ratings have been comfortably above 50%, well above her predecessor Ishiba's level.
- There may be some focus on USD/JPY from a US standpoint if the pair continues to rally strongly (but this may be more of an issue if the 155.00 region is breached).
- Back JGB yields firmed a touch through late Monday trade. The 10yr above 1.67%, while the 30yr closed around 3.085%, leaving 100-day EMA support intact.
- BoJ pricing for Thursday's meeting remains little changed, with only an implied rate change of 3bps (per OIS dated contracts).
AUSSIE 10-YEAR TECHS: (Z5) Clears Resistance
- RES 3: 95.982 - 76.4% retracement Sep’24 - Nov’24 downleg
- RES 2: 95.960 - High Apr 7 (cont.)
- RES 1: 95.900 - High Oct 17
- PRICE: 95.815 @ 15:59 BST Oct 27
- SUP 1: 95.510 - Low Sep 3
- SUP 2: 95.415/95.300 - Low May 15 / Low Jan 14
- SUP 3: 95.275 - Low Nov 14 (cont) and a key support
Aussie 10-yr futures rallied further Friday, building on gains earlier in the week posted off the poor Australian jobs data. This further signals that the recent move lower is a correction. Near-term resistance has been cleared into 95.780, the Sep 12 high. The clear break of this level signals scope for a continuation higher and opens 95.960, the 76.4% retracement level for the Sep’24 - Nov’24 downleg. On the downside, key short-term support to watch has been defined at 95.510, the Sep 3 low.
AUSSIE 3-YEAR TECHS: (Z5) Strong Weekly Close
- RES 3: 97.796 - 1.618 proj of the Sep 3 - 12 - 15 price swing
- RES 2: 96.780 - High Jun 26 (cont)
- RES 1: 96.700 - High Sep 12
- PRICE: 96.555 @ 15:52 BST Oct 27
- SUP 1: 96.280 - Low May 15 (cont.)
- SUP 2: 95.900 - Low Jan 14 (cont.)
- SUP 3: 95.760 - Low 14 Nov ‘24
Aussie 3-yr futures briefly bounced on the US CPI print keeping focus higher despite the break of support last week. Short-term resistance at 96.615, the Sep 12 high, has been broken, with 96.780 is the next upside target. Clearance of this level puts markets at fresh multi-month highs. 96.280 marks next major support - but markets are some way off this mark now.
