Matt Simpson
@cLeverEdge
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Market Analyst covering forex, indices, gold and oil during the Asian session with @forexcom and @CityIndex. No DM's.
Brisbane, Queensland
Joined July 2010
Gold is just $65 away from its $3k milestone, Crude oil bulls return At this point, it would just be rude for gold not to tag 3k. A nice bounce further from 200-day SMA on crude oil too, even if daily volumes were the lowest of the year.
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Bullish USD sentiment wanes, GBP/USD bears have a rethink - COT Report Sentiment is slowly turning against US dollar bulls. Not only did we see a drop of over $3 billion of net-long exposure to the US dollar last week, but gross-longs increased on all FX majors against it. The US dollar index also rose 10.5% from the September low to January high, and its rally stopped shy of the 2022 high. Still, it is hard to bet against the US dollar, but it could seem feasible that we’ve entered a period of consolidation. For us to expect any meaningful pullback on the dollar likely requires a dovish Fed, and that seems quite unlikely over the foreseeable future. Traders should keep an eye on what Jerome Powell says at this week’s semi-annual testimony to the House of Financial Services Committee alongside CPI figures. As both have the potential to see the US bid, which leaves the question of whether we need to be on guard for a breakout above 110 and for another crack at the 2022 high around 114.
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USD/CAD, USD/JPY, GBP/USD: Key levels heading into NFP As noted in yesterday’s report, we can likely look beyond any positivity from this week’s ADP figures, given it correctly predicts the month-over-month direction of NFP job growth less than a flip of a coin. With that said, forecasters have generally been too gloomy on the headline NFP figure roughly two-thirds of the time since the pandemic, a figure which has also held true over the past 12 months. So that should perhaps be factored in with the 154k forecast for NFP today, on the back of a print in excess of 200k last month.
So how good is APD at predicting NFP, anyway? With the monthly ADP payrolls figures delivering a solid set of data ahead of Friday’s nonfarm payrolls report, I take a closer look to see if the ADP can help pick the direction of NFP.
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GBP/JPY bears ride the wave of divergent BOE, BOJ policy expectations A dovish BOE cut and bets that a BOJ hike could be much closer than expected saw GBP/JPY lead the way lower on Thursday. But price action across the board suggests it could be year of the yen. Also see: AUD/JPY LT outlook: EUR/JPY LT outlook:
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RT @Scutty: The US long bond bullish breakout matters for broader markets, especially if it sticks. Here's why.
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So how good is APD at predicting NFP, anyway? With the monthly ADP payrolls figures delivering a solid set of data ahead of Friday’s nonfarm payrolls report, I take a closer look to see if the ADP can help pick the direction of NFP.
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WTI crude is down, but not out With futures traders continuing to cover longs, further losses cannot be ruled out without a fresh fundamental catalyst. But given crude oil's 11% decline and plethora of support levels above $70, a technically-driven bounce is not a crazy idea. #OOTT
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ASX 200 Futures: Finding a Signal Amid the Noise We're sandwiched between an incoming NFP report and the turbulence from Trump's tariffs. That could provide a double dose of 'fickle' price action, which we tend to see leading up to big events such as nonfarm payrolls or Fed meetings. With that in mind, I update my bearish bias on ASX 200 futures, using the intraday timeframe and a glance at Wall Street indices.
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AUD/USD, NZD/USD: Commodity FX lead the way amid mild risk-on bounce Given that commodity currencies such as AUD/NZD and NZD/USD have succumbed to USD strength for the best part of four months, the idea of a correction may not be overdue. Add into the mix bullish divergences on net-short exposure and false break of key lows, perhaps one is already (tentatively) underway.
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If I were one of the several Fed members scheduled to speak this week, I would seriously consider rescheduling. I mean, what the heck are they really going to say of any value? Data is not allowing the dovish tilt that markets want to hear. And while the trade war is kicking off, it's still within its infancy and therefore keeps the Fed's hands tied. - Q1 GDP is estimated at 3.9% according to Fed Atlanta's GDPnow - ISM manufacturing expanded for the first time since September 2022 - New orders also expansive - Inflationary pressures continue to build with 'prices paid' expanding at its fastest pace in 8 months Remember, ISM 'prices paid' accelerated to a near 2-year high of 64.4 in December, so that will be a key metric to watch this week, amid the trade war chaos of course.
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Wall Street gaps lower, ASX under pressure following Trump’s tariffs Wall Street gaps lower, ASX under pressure following Trump’s tariffs
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