PHILIPPINES: Unemployment Rate Rises To 5.8%, Fresh Highs Back To mid 2022
The Philippines unemployment rate has risen to 5.8% for January (from 4.4% in Dec), fresh highs back to mid 2022, see the chart below. The rate does tend to rise at the start of the year versus Dec levels. Still, it does point to a more challenging economic backdrop for the Philippines, as growth slowed sharply through the second half of last year amid the corruption scandal. The underemployment rate surged to 13.2% from 8.0%. The BSP may be a little stuck to provide further strong policy support given the surge in oil prices and higher USD/PHP levels.
Fig 1: Philippines Unemployment Rate Back To Mid 2022 Levels
Source: Bloomberg Finance L.P./MNI
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USD: BBDXY-Back Testing 1175-1180 Support, As Headwinds For The USD Grow
The BBDXY range overnight was 1180.25 - 1183.97, Asia is currently trading around 1182. The USD has fallen below most short-term supports and is looking to the lows seen in January now. It does not take a lot for the sellers to come back to market as nobody wants to miss out on this trade. The break lower in US yields is just adding to the USD headwinds and the market will be bracing for more bad news from the employment data tonight. On the day, the first resistance is toward the 1185-1187 area and then 1195 where I suspect we could see buyers return. A sustained break below 1175-1180 could potentially signal the start of another leg lower targeting 1150 first and then potentially 1115.
- Daily Chartbook X: “Dollar shorts chase recent weakness and are now back to 2025 short levels”. - @CameronDawson @NewEdgeWealth. See Fig.1 below.
- Oguz Erkan on X: Ray Dalio: “Debt problem is followed by devaluation of the currency.” Looks like this is exactly how the US will handle its debt problem. Kevin Warsh’s Fed will peg short-term rates to artificially low levels, and buy treasuries to keep them down, inflating the debt away.” This is why central banks are dumping US debt and buying gold instead.” https://x.com/oguzerkan/status/2020827168436080719?s=20
- The BBDXY Average True Range for the last 10 Trading days: 564 Points
Fig 1: USD Shorts Increasing
Source: MNI - Market News/Bloomberg Finance L.P/@dailychartbook
JPY: USD/JPY Eyeing 154.00 Downside Test
USD/JPY is tracking towards 154.00, just under overnight lows (154.06). Earlier highs for the pair were at 154.52. USD/JPY bounces being faded has been a consistent theme since Monday, post the election result. Broader USD sentiment is a touch negative so far today, although yen gains of +0.20% are the standout within the G10 FX space. Note in terms of downside support: 152.10 Low Jan 27 and the bear trigger.
AUD: EUR/AUD - Stalls Toward 1.6800, Break Below 1.7000 Looks Significant
The overnight range was 1.6806 - 1.6849, Asia is currently trading around 1.6805. The pair is consolidating toward 1.6800 after its recent break back below 1.7000. This looks to potentially be a significant break signalling a deeper pullback thus ensuring any decent rallies should now find eager sellers. On the day, the first sell-zone is back toward the 1.6900-1.6930 area and then 1.7000-1.7050. The AUD bulls would be cheering this move and adding to AUD longs that have been outperforming across the board. This move potentially targets the 1.6000-1.6400 area.
- The EUR/AUD Average True Range(ATR) for the last 10 Trading days: 125 Points
Fig 1: EUR/AUD spot Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
