Market Analytics and Technical Considerations
Key Points
According to November NFP figures, the US jobs were added 263k employment.
The average hourly wage rise is double what was anticipated (0.6% vs. 0.3%). Worried about potential wage-price spirals, MoM
The jobless rate is still 3.7%.
The US Job Market Continues to Show Resilience as November NFP Posts Another Beat
According to November NFP figures, the US economy added 263k jobs.
The October total of 261k was updated to 284k. The hourly wage average rise was twice as high as anticipated (0.6% vs. 0.3%). MoM
The US labor market is still demonstrating strong resiliency amid tightening financial conditions, as evidenced by the November NFP data’s surprising upward revision of the October figure. The average hourly wage growth that has increased month over month and year over year may worry Fed members, but this is typically due to the fact that workers have more negotiating power when there aren’t many applicants for open positions. Therefore, businesses comply with increased wage demands, and that is why the Fed sees a minor slowdown in job growth optimistically.
Spotlight
The strong NFP numbers raise the possibility of ending the recent dollar decline and delaying the perception of a core, dovish change within the Fed. Recent dovish comments from the Fed caused markets to price in a lower Fed funds rate as the terminal rate; it ended up little below 4.9% and moved down along with it, to 3.5% before increasing to 3.68% just after release.
INSTANT REACTION
As the market accepted the notion of an end – cap level and a slower pace of future raising rates, the dollar index has fallen in recent trading sessions. This scenario is what has caused the dollar to rise as the re – pricing correction occurs, along with the stronger than anticipated NFP statistics. As we come closer to the end of the rate-hike cycle, it is less probable that the strong jobs report would cause a sustained surge in DXY back to the high.
Since rising from a point close to the September low, gold has been on an incredible run. The important 1800 psychological degree of resistance seems to have been reinforced by the NFP print. At these prices, the stronger U.S dollar and higher rates make gold a somewhat less appealing option, giving long-term investors the chance to partially or completely cut holdings.
E-Mini S&P Futures
Plummeted by more than 1.5% on the announcement of the NFP, with a subsequent partial claw back of those early losses. Following Powell’s dovish remarks, US stocks surged upwards on Wednesday, drawing closer to the crucial relatively long trendline barrier. Given that US equity market players have lately tended to climb rather easily and are more responsive to positive news than negative news, this may only be a temporary setback. If the US PPI shows a smaller-than-anticipated increase in prices at the factory gates, the trendline resistance may be tested once more the following week.
