Market Watch AU – 5th January 2024
The AUDUSD felt the pressure of a stronger US-dollar overnight, following the release of solid economic data in the form of a robust US ADP employment and a fall in unemployment claims. After the data the market began to price in a less dovish Fed and cutting the extent of rate cuts expected for later this year. Still to come though are the Non-farm Payrolls for December due later tonight which is expected to reveal less jobs added and an uptick in unemployment from 3.7% in Nov to 3.8% for Dec. The AUDUSD pair continues to pressure the 0.67-cents support but has sustained several sessions, helped by some of the latest China PMI services data and buyers of AUDJPY. An upbeat result from US Non-farm payrolls tonight may add further pressure to the AUDUSD pair. The initial support level is seen at 0.67-cents with further weakness allowing a move to 0.6680’s behind, while the first level of supply comes lower to 0.6720/25 intraday and 0.6740/50 behind offering further resistance. Momentum though, would still suggest the downside is the more vulnerable move.
Wall Street indices had a positive day, posting its first up-day for the year. Investor expectations, for the extent of US rate cuts, were tempered by results of employment still showing resilience. The DJI recouped its previous session loss of +0.4%, while the S&P500 gained +0.1%, though the Nasdaq dropped -0.06% for the day. Australian equities are set to start the day flat, with miners offsetting energy shares and investors positioning for tonight’s US Non-farm Payrolls.
Gold prices held steady as investors position for the release of US Non-farm Payrolls for December that could influence the dot plot for the Fed and their interest rate expectations.
Copper prices fell against the back drop of stronger US-dollar moves and tempering of investor expectations for US rate cuts soon. Iron Ore futures held firm while holding on to expectations that Chinese authorities will bolster economic stimulus and steelmakers expected to lift demand for restocking ahead of the holidays.
Brent Crude Oil settled lower for the day after a choppy trading session. US demand saw an unexpectedly large build up of gasoline and distillate inventory for the week.
Open today 0.6707
Yesterday’s Range 0.6697 / 0.6760
Open today 0.6235
Yesterday’s Range 0.6221 / 0.6285
Yesterday’s Range 1.0752 / 1.0788
Yesterday’s Range 0.6118 / 0.6181
Yesterday’s Range 4.8048 / 4.8376
Yesterday’s Range 0.5283 / 0.5329
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