Hello traders! This is Adam Harris, your trusted Ambassador at FXGlobe. Let’s dive into the intricate world of financial markets and review the twists and turns we’ve observed this week, along with a preview of what to expect in the week ahead.
FXGlobe Market Recap
Our week began Down Under, where Australia’s central bank kept its Cash Rate steady at 4.10%, a move in line with market expectations. This decision, detailed in the Reserve Bank of Australia’s rate statement, has significant implications for investors both domestically and worldwide.
Shifting our focus to the US, the ISM Manufacturing PMI fell short of predictions, indicating a slight contraction in the manufacturing sector, which accounts for a significant portion of the economy. In contrast, the JOLTS Job Openings data slightly outpaced predictions, showing continued demand for labour in the American market.
Meanwhile, New Zealand’s economy experienced a notable upswing in employment, growing by an impressive 1.1% quarter over quarter. However, the Unemployment Rate nudged up to 3.6%, a figure that bears watching in the weeks to come.
US Labour Market Highlights
- The mid-week reported an impressive gain in the ADP Non-Farm Employment Change: 455K new jobs were added. This figure more than doubled the forecast, emphasising the robustness of the American job market.
UK’s Monetary Developments
- The Bank of England released its Monetary Policy Report and maintained the Official Bank Rate at 5.00%.
- An intriguing change in the Monetary Policy Committee’s rate vote was observed: 8-0-1, from the former 7-0-2. This offers insights into the UK central bank‘s view on the economy.
End-of-Week Data Round-up
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Canada:
- Employment Change data shrank by 6.4K jobs.
- The Unemployment Rate marginally increased to 5.5%.
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US:
- Average Hourly Earnings were on par with projections, rising 0.4% month on month.
- The Non-Farm Employment Change report showed an addition of 185K new jobs, slightly below the 205K forecast.
- The Unemployment Rate remained stable at 3.6%.
Financial Markets Overview
- Forex majors mostly balanced out against the dollar.
- Precious metals such as Gold and Silver ended the week on a downward note.
- Crude oil registered gains.
- Equities and Global Indices seem to be commencing a weekly downward correction.
Market Forecast
Looking ahead, we have some significant economic indicators to watch for in the coming week. On Wednesday, New Zealand’s Inflation Expectations will be closely monitored as it impacts the central bank’s monetary policy decisions. Thursday brings the US Consumer Price Index (CPI) data, another essential measure of inflation.
Friday will see the release of the UK’s Gross Domestic Product (GDP) report, giving us a clear picture of the country’s economic health. Also on Friday, the US will release its Core Producer Price Index (PPI) data, an early indicator of inflation.
From a trading perspective, opportunities may present themselves in the AUD and CAD crosses, and short-sellers might want to keep an eye on indices for potential corrections.
This chart here shows a bearish weekly candle for the German DAX, battling a bit with resistance. This could lead to moves lower if this most recent candle’s low is broken.
This next chart shows the SP500 with a bearish weekly candle. Price is over-extended, and if it is going to start a weekly correction, this coming week may be the one.
EURCAD weekly chart sets up with a bullish continuation candle, similar to EURAUD, GBPCAD and GBPAUD. There may be moves higher in the coming trading days.
Finally, it appears as though the EUR is settling up as a bullish close on the weekly, hinting at the potential for a weaker USD next week. Day traders will be watching key levels.
That’s all for this week, traders. Remember to stay vigilant, keep an eye on these indicators, and as always, choose your trades wisely. Until next time, this is Adam Harris with FXGlobe, signing off.
