US DATA: Slowly Getting Closer To Flatter Beveridge Curve [2/2]
- The Indeed job postings data have been referenced by multiple FOMC officials including Powell as one metric the Fed can watch to monitor job openings amidst a lack of JOLTS data during the government shutdown.
- These latest data from both Indeed and Revelio point to a further modest decline in the vacancy rate, at a point that could start to become more pivotal for the Beveridge curve.
- Powell in the Q&A of last month’s NABE speech specifically pointed to this relationship to suggest that “You’re at a place where further declines in job openings might very well show up in unemployment. You’ve had this amazing time where you came straight down, but I just think you’re going to reach a point where unemployment starts to go up.”
- Of course, the unemployment rate has seen slow trend increase from consistent readings around the 3.6% mark in 2022-23 to 4.32% in latest data for Aug (or 4.36% in the Chicago Fed’s nowcast for October also released today) after a stabilizing between 4.0-4.25% through May 2024-Jul 2025.
- We’re now getting towards what has historically been a flatter section of the Beveridge curve as the chart below shows.
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USDJPY TECHS: Pierces Key Resistance
- RES 4: 152.31 High Feb 19
- RES 3: 151.78 2.0% 10-dma envelope
- RES 2: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg
- RES 1: 151.21 High Mar 28 & Oct 07
- PRICE: 151.17 @ 16:39 BST Oct 7
- SUP 1: 149.05 Low Oct 6
- SUP 2: 148.10/147.67 20- and 50-day EMA values
- SUP 3: 146.59 Trendline support drawn from the Apr 22 low
- SUP 4: 145.49 Low Sept 17
A bullish theme remains intact in USDJPY following Monday's strong start to the week. The move higher has resulted in a breach of resistance at 149.96, the Sep 26 high and a key short-term resistance. This has exposed the key medium-term resistance at 150.92, the Aug 1 high. It has been pierced, a clear break of it would confirm a resumption of the bull leg that started Apr 22. Monday’s intraday low at 149.05 is first support.
EURGBP TECHS: Monitoring Support At The 50-day EMA
- RES 4: 0.8835 High May 3 2023
- RES 3: 0.8800 Round number resistance
- RES 2: 0.8769 High Jul 28 and the bull trigger
- RES 1: 0.8751 High Sep 25
- PRICE: 0.8685 @ 16:38 BST Oct 7
- SUP 1: 0.8673/8597 50-day EMA / Low Aug 14 and the bear trigger
- SUP 2: 0.8633 Low Sep 15
- SUP 3: 0.8562 50.0% retracement May 29 - Jul 28 upleg
- SUP 4: 0.8540 Low Jun 30
Short-term weakness in EURGBP appears corrective and the trend condition is bullish. The cross traded lower on Monday. Initial firm support to watch lies at 0.8673, the 50-day EMA. A clear break of this level would signal scope for a deeper retracement. Note that the key trend support lies at 0.8597, the Aug 14 low. A breach of this level would instead reinstate a bearish threat. For bulls, key resistance and the bull trigger is 0.8769, the Jul 28 high.
PIPELINE: Corporate Bond Update: $1.15B TD Synnex 2Pt Launched
$7.85B total to price Tuesday:
- Date $MM Issuer (Priced *, Launch #)
- 10/07 $2.5B *Bank of England 5Y +8a
- 10/07 $1.75B *CPPIB 3Y SOFR+39
- 10/07 $1.75B #Angola $1B +5Y 9.25%, $750M 10Y 10.125%
- 10/07 $1.15B #TD Synnex $550M +3Y +75, $600M 10Y +118
- 10/07 $700M *Türkiye Garanti Bankası 10.5NC5.5 7.625%
