Market Watch AU – 5th February 2024
A surprise release for US Jobs report on Friday night has seen a surge in US Treasury yields and bolstering a move for the US-dollar as a result. A staggering 353k jobs were added in January, while December was revised higher to 333k as well, and was well ahead of any of the expectations around 185k. If a US Fed rate cut in March was not off the table already, these numbers certainly dampen any prospect of the central bank cutting rates that soon. The swing to the US-dollar against all the majors has followed the moves in US Treasuries. For the AUD, it has swung to the support at 0.65-cents against the US-dollar and as a barometer of risk sentiment , tussles between the optimism of US and the concerns over the China economy, where the IMF warned in their latest review could slow to growth of 3.5% by 2028. Ahead this week we look for the results of the RBA meeting on Tuesday with a number of Asia economic releases to entertain traders in the meantime. For AUDUSD, day traders will monitor the support at 0.6500/10 where a breach could open up a move to 0.6450’s while a preference to sell into any strength will see limited moves to 0.6550/75 initially.
Wall Street stocks continued higher with the US Employment numbers, reassuring investors that the economy is robust, even though they close the door for any near term rate cuts. Strong earnings results for the likes of mega techs, Amazon and Meta have added to the enthusiasm. Problems in the US regional banking sector don’t seem to be causing too much angst just yet, but worth monitoring. The DJI was up +0.4% for the session, while the S&P500 was up +1.1%, and the Nasdaq was higher by +1.7% for the day. Australian shares are looking to trade lower today as investors turn to the RBA meeting and their outlook on interest rate directions.
Gold prices are convincingly lower on the back of the batter than expected US employment numbers as US Treasury yields quickly firmed and took the US-dollar with them and pushing back the prospect of Fed rate cuts soon.
Copper prices fell on the LME as US Jobs numbers surprised the market and rallied the US-dollar, while concerns over global industrial activity continues to weigh down the outlook for demand. Dalian Iron ore futures traded to a two week low, as traders continue to weigh up China demand as they tackle their property sector woes and further requirements for economic stimulus.
Brent Crude prices traded lower and reversed the gains of the previous week, with demand concerns again moving to front of mind and as cease fire negotiations between Israel and Hamas appear to be developing as a possibility.
Open today 0.6516
Yesterday’s Range 0.6503 / 0.6610
Open today 0.6068
Yesterday’s Range 0.6059 / 0.6160
Yesterday’s Range 1.0694 / 1.0743
Yesterday’s Range 0.6032 / 0.6074
Yesterday’s Range 4.6926 / 4.7530
Yesterday’s Range 0.5148 / 0.5180
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