IRON ORE: Mid Point Of Recent Ranges, Near $105/Ton, Watching China Property

• RES 4: 130.99 76.4% retracement of Jun 13 - Sep 25 bear leg (cont)   
• RES 3: 130.80 High Jun 13 and key resistance 
• RES 2: 130.63 1.500 proj of the Sep 3 - 10 - 25 price swing
• RES 1: 130.59 High Oct 17    
• PRICE: 130.00 @ 05:39 BST Oct 21
• SUP 1: 129.68/129.44 Low Oct 15 / High Sep 10       
• SUP 2: 129.20 20-day EMA 
• SUP 3: 128.86 50-day EMA 
• SUP 4: 128.25 Low Oct 7  

Bund futures continue to trade below last week’s high, however, a bull cycle remains intact. The impulsive nature of the latest rally and a fresh cycle high on Friday, paves the way for a test of the next key resistance 130.80, the Jun 13 high. Clearance of this level would strengthen the bullish condition. Note that the contract is overbought, a deeper pullback would allow this condition to unwind. Initial key support is 129.20, the 20-day EMA.

Gold has stabilised today during the APAC session after rising 2.5% on Monday. Prices rose to $4375.38/oz and then fell to $4332.95 and are now down 0.4% to $4340.5. Equities are rallying and the US dollar is slightly stronger (BBDXY +0.1%) but the factors bullion ignored yesterday may have also contributed to the pause in the rally. It is in overbought territory, 2025 Fed easing is already priced in, there is talk that the US government shutdown could end this week and US-China trade tensions appear to have eased. 

• Both gold and silver continue to hold well above initial support levels of $4140.8, 15 October low, and $48.736, 20-day EMA, respectively.
• The 1 November deadline for a US-China trade deal remains but President Trump said that the US will “be fine” with China. Economic Council Director Hassett also gave indications that the government shutdown could conclude this week.
• Silver is down 1.1% to $51.87 after falling to $51.607. It is a smaller market than gold and so moves tend to be amplified. It is also signalling that it is overbought.
• Equities are stronger across the region with the Hang Seng up 1.7% and ASX +0.7% but the S&P e-mini is flat. Oil prices are lower with WTI -0.3% to $56.84/bbl. Copper is 0.2% higher.
• Later US October Philly Fed non-manufacturing and September Canadian CPI print. ECB President Lagarde and Board member Lane speak. 

SEEK data show that labour demand improved over Q3 while supply remains positive it slowed. With Q3 employment rising only 0.2% q/q down from Q2’s 0.6%, SEEK job ads may be signalling some possible improvement over Q4. A stabilisation of the labour market would be helpful for monetary policy decision makers if inflation prints to the upside.

Australia SEEK job ads %

• September SEEK new job ads rose 1.1% m/m, the third straight monthly increase. Ads increased 1.7% q/q in Q3 a clear pick up after Q2’s 0.6% q/q contraction. They are still down 2.4% y/y in September but that follows -12.6% y/y in March and is the best result in almost three years.
• Applicants per job were little changed in August rising 0.1% m/m and 10.9% y/y following July’s 2.8% m/m & 11.7% y/y. It seems that growth in labour supply slowed in Q3 after rising 4% q/q in Q2. In Q3, the labour force grew 1.8% y/y while employment was up 1.5% y/y.
• SEEK noted that a number of large industries had increased job ads including trades & services, manufacturing and transport & logistics. Professional and financial services continue to decline. 

Australia SEEK applicants per job 2013=100

Source: MNI - Market News/SEEK