EbonFX

Market Update: Key Economic Indicators and Their Impact • JOLTS Job Openings (USD): U.S. job openings rose to 7.74 million in October, beating forecasts and signaling a cooling labor market compared to 2022. Upcoming employment data and the Federal Reserve’s December meeting could shift market sentiment and rate expectations. • GDP q/q (AUD): Australia’s Q3 GDP grew by 0.3% quarter-on-quarter, matching forecasts but undershooting the 0.5% consensus. Impact on the AUD: Australia’s modest GDP growth could limit the Australian dollar’s upward momentum, especially if global risks persist or U.S. economic data supports a stronger USD.

The ISM Manufacturing PMI for November showed a slower contraction in US manufacturing, with the PMI rising to 48.4 from 46.5. The Employment Index improved to 48.1, and the New Orders Index rose to 50.4, while the Prices Paid Index dropped to 50.3. Despite these gains, the US Dollar Index remained strong above 106.50. While the US manufacturing sector is stabilising, the strengthening USD and cautious global growth outlook may continue to pressure the AUD in the near term. However, signs of easing inflation or a shift in Fed policy could support the Australian Dollar. #EbonFX #ISMManufacturing #USDollar #ForeignExchange

Economic Snapshot: The US Producer Price Index (PPI) rose 2.4% YoY in October, slightly above forecasts and accelerating from September’s 1.9% gain. Core PPI also climbed, highlighting persistent inflationary pressures that may complicate the Federal Reserve’s easing cycle. With inflation risks still present, the liklihood of a December rate cut dropped to 72% from 82%. Labor Market: Initial Jobless Claims dipped to 217K, reflecting resiliience in the laour market which has supported a boost in the US Dollar Index (DXY), remaining close to yearly highs despite a recent pullback. Powell’s Message: Fed Chair Jerome Powell stressed a careful approach to rate cuts, with inflation proving to be sticky. His message? The Fed is committed to gradually bringing inflation down while avoiding hasty decisions, leading to a further drop in December rate cut expectations.

The Federal Reserve trimmed interest rates by 25 basis points, lowering the target range to 4.5%-4.75%. Fed Chair Jerome Powell expressed confidence in the economy, noting the Fed was “feeling good” about progress toward the 2% inflation target, though inflation remains somewhat elevated. Despite the rate cut, major US stock indices showed mixed results: • The S&P 500 rose nearly 0.7% • The Nasdaq Composite gained 1.4% • The Dow Jones Industrial Average stayed mostly flat, up by just 15 points. USD After reaching multi-month highs on Wednesday, the US Dollar Index (DXY) lost some ground in a broad-based profit-taking session. Investors are still digesting the implications of both Trump’s recent victory and the Fed’s quarter-point rate cut. Markets remain sensitive to any further comments that might influence expectations for future rate changes. AUD/USD AUD/USD regained momentum after Wednesday’s sharp retracement, climbing to fresh multi-day highs near 0.6670. The Australian dollar is benefiting from improved global risk sentiment and support from commodity prices, especially metals. A break above 0.6700 could signal a stronger move toward the 0.6750 region. Currently, AUD trades at approximately $1.50 to $1 USD.

Market sentiment has shifted following the Federal Reserve's aggressive rate cuts, with expectations now leaning toward a softer monetary policy approach. Future rate cuts will depend on economic data, with inflationary pressures still present in the US. Meanwhile, the euro is under pressure from cautious ECB comments, the British pound has fallen amid inflation concerns, and the Japanese yen has weakened due to the BOJ's cautious policy stance. Key Data coming up on Friday  - USD Flash Manufacturing PMI  - USD Flash services PMI Contact our team for a free FX quote today! https://lnkd.in/gT4nQ-p6

AUD Employments figures came out positive boosting the AUD against all the majors with Unemployment down 0.1% to 4.1% and 64.1k New jobs created in September! It’ll be some time before the RBA takes any action as they’ll be monitoring the labour market closely before making any moves. European Central Bank (ECB) is looking to cut rates by 25bp from 3.65% to 3.4% despite being fully priced in we can expect some volatility around this event. US Retails sales and Unemployment Claims data will be released later tonight as the market will be watching closely to determine the aggression of remaining rate cuts for this year by the Federal Reserve (FED).

USD Quiet market activity into the end of last week should continue today with the US and Japan both being on holiday. The themes still playing out are - US yields and how much they will cut this year, clarity around how much stimulus the Chinese government are prepared to deliver and ongoing tensions in the Middle East. Coming up on Thursday this week we get US Retail Sales and the ECB expected to cut 25bp - apart from that it appears to be a fairly quiet one on the data front. AUD A$ had a range of 0.6725/0.6759. The Aussie continues to trade quietly in a tight range. The main event locally this week will be the Australian employment data due out on Thursday, with expectation of the headline number around +25k.  On Wednesday we get the NZ CPI . Think we continue to trade quietly this week with influence to come from any China stimulus news and moves in US interest rates. Suggested range 0.6725/75. AUD/JPY - 100.25/75 AUD/EUR - 0.6150/80 AUD/GBP - 0.5150/70 AUD/NZD - 1.1025/75

USD Yields continue to push higher following on from Friday's strong US employment data. Middle East tensions continue to push oil prices higher, which is also seen as inflationary, causing the market to re-price the pace of FED easing. Stocks are lower and the US$ is mixed as investors move towards safe haven/risk-off strategies. Mid. East tensions aside, the other important event this week will be the US CPI number on Thursday.   AUD A$ has had a range of 0.6744/0.6810. The A$ and NZ$ both whipping boys for risk-off (VIX up 19%) as the world's attention rests on Israel and any plans for retaliation against Iran/bombing oil fields. China are back from their Golden Week holiday and at 10am we are due to get announcements from the National Development and Reform Commission. The market will be watching very closely to see if they deliver something concrete around economic stimulus. Ahead of that we suggest a range of 0.6740/80. The bigger upside resistance point comes in around 0.6820.   AUD/JPY - 99.50/100.50 AUD/EUR - 0.6140/70 AUD/GBP - 0.5155/75 AUD/NZD - 1.1000/50

USD All eyes on the Middle East as the tension builds. Oil is up 5%, that makes 8% on the week, and the VIX is up 8.3%, closing back above 20. The US ISM Services PMI came in at 54.9 v expectations of 51.7, which also helped US yields higher and put a bid under the US$. A hot employment number tonight will definitely get some market participants rethinking the pace of FED cuts? Elsewhere the sterling lost ground following dovish comments from BOE Governor Bailey. AUD A$ had a range of 0.6830 to 0.6888, closing the session out down 0.65%. Nervous speculators selling the A$ against a Middle East driven risk-off scenario and the backdrop of a generally stronger US$. No local data here today so expect the A$ to be influenced by flow driven moves going into the long weekend. Have to be aware of any Mid East developments, and wait for the Payrolls number tonight at 10.30pm. Until then suggest a range of 0.6820/70. AUD/JPY - 100.00/101.00 AUD/EUR - 0.6190/0.6215 AUD/GBP - 0.5200/30 AUD/NZD - 1.0990/1.1040

USD USD/YEN had a decent move,143.40 to 146.50, after PM Ishiba's dovish comments. The US$ also got a minor lift from the ADP data which came in at 143k v 124k. Usual caveats apply around this data set, but ahead of Non farm Payrolls on Friday we did get a small lift in yields. US stocks were flat - interesting to see the Hang Seng post a 6.2% gain. The VIX drifted back a couple of percent as market waits to see the next Middle east developments. Elsewhere dovish central bank speak from ECB members see the Oct 17 cut almost fully priced in now. Tonight we get US ISM Services PMI and a few FED speakers. AUD A$ had a range of 0.6876 to 0.6916. A$ held up well against the stronger US$, which saw us hit a high in AUD/JPY of 101.04. No major local data releases today, expect A$ to trade quietly within recent ranges - suggest 0.6875/0.6905. Still seeing importers happy to put on some hedges around 0.6900.  AUD/JPY - 100.70/101.70 AUD/EUR - 0.6220/40 AUD/GBP - 0.5175/0.5200 AUD/NZD - 1.0975/1.1025