Forex News Timeline

Friday, December 3, 2021

EUR/USD manages to bounce off the daily low in the 1.1280 region on Friday. Further downside is expected to meet initial contention around 1.1230 (Nov

EUR/USD looks to leave behind two consecutive sessions with losses.If sellers regain control, the initial support comes at 1.1235.EUR/USD manages to bounce off the daily low in the 1.1280 region on Friday. Further downside is expected to meet initial contention around 1.1230 (November 30), which is the last defence for another assault to the 2021 low at 1.1186 (November 24). The probability of further losses remains unchanged as long as EUR/USD trades below the 2-month resistance line (off September’s peak) near 1.1550. In the longer run, the offered stance in spot is expected to persist while below the 200-day SMA at 1.1815. EUR/USD daily chart  

DXY adds to the gradual rebound from weekly lows in the mid-95.00s (November 30), with gains so far capped near 96.30. The continuation of the upside

DXY inches higher and extends the break above 96.00.Further up is located the YTD peak near 97.00.DXY adds to the gradual rebound from weekly lows in the mid-95.00s (November 30), with gains so far capped near 96.30. The continuation of the upside momentum targets the 2021 highs in levels just shy of the 97.00 barrier (November 24) ahead of the round level at 97.00 and 97.80 (high June 30 2020). In the meantime, while above the 2-month support line (off September’s low) near 94.20, extra gains in DXY remain well on the table. In addition, the broader constructive stance remains underpinned by the 200-day SMA at 92.56. DXY daily chart  

Brazil Industrial Output (MoM) below expectations (0.6%) in October: Actual (-0.6%)

Brazil Industrial Output (YoY) came in at -7.8%, below expectations (-5%) in October

EUR/JPY manages to clinch the second session with gains above the 128.00 yardstick at the end of the week. If the rebound gathers extra pace, then the

EUR/JPY reclaims the 128.00 mark and above on Friday.Immediately to the upside comes the monthly high at 128.78.EUR/JPY manages to clinch the second session with gains above the 128.00 yardstick at the end of the week. If the rebound gathers extra pace, then the cross should face a minor hurdle at the 10-day SMA at 128.53 ahead of the more relevant monthly peak at 128.78 (December 1). Further up is located the interim hurdle at the 20-day SMA (129.31) prior to the weekly high at 129.60 (November 23). Above the latter, the downside pressure is expected to mitigate somewhat. Looking at the broader picture, the outlook for the cross is expected to remain negative while below the 200-day SMA, today at 130.53. EUR/JPY daily chhart  

Friday's US economic docket highlights the release of the closely-watched US monthly jobs data. The popularly known NFP report is scheduled for releas

US monthly jobs report overview Friday's US economic docket highlights the release of the closely-watched US monthly jobs data. The popularly known NFP report is scheduled for release at 13:30 GMT and is expected to show that the economy added 550K new jobs in November, up from 531K in the previous month. The unemployment rate is expected to edge lower to 4.5% from 4.6% in October. Given Wednesday's stronger US ADP report on private-sector employment, market participants have turned more optimistic about the official figures. According to Joseph Trevisani, Senior Analyst at FXStreet: “The November payroll report stands a good chance of performing better than forecast. Signs from the labor market and consumer economy point to a continued recovery in the United States.” How could the data affect EUR/USD? Against the backdrop of stubbornly high inflation, a stronger than expected headline NFP would further fuel speculations about a more aggressive policy tightening by the Fed. This would result in higher US Treasury bond yields and a stronger US dollar. Conversely, a weaker print – though seems unlikely – is likely to offset by the fact that the Fed has acknowledged a sufficient labor market recovery to permit higher interest rates. This, in turn, suggests that the path of least resistance for the USD is to the upside and down for the EUR/USD pair. Meanwhile, Eren Sengezer, Editor at FXStreet, offered a brief technical outlook for the major: “The Relative Strength Index (RSI) indicator on the four-hour chart retreated below 50, suggesting that sellers look to retain control of EUR/USD.” Eren also outlined important technical levels to trade the EUR/USD pair: “At the time of press, the pair was testing 1.1290 (Fibonacci 23.6% retracement of November downtrend). The 50-period SMA aligns as the next support at 1.1280 and additional losses could be witnessed toward 1.1235 (Tuesday low) in case that level turns into resistance.” “The bearish pressure could weaken if bulls reclaim 1.1320 (100-period SMA, 20-period SMA). 1.1350/60 area (static level, Fibonacci 38.2% retracement) could be seen as the next resistance,” Eren added further. Key Notes   •  Nonfarm Payrolls Preview: Jobs’ headline could be a make it or break it in tapering’s decision   •  US Nonfarm Payrolls November Preview: Can we agree the labor market is healing?   •  EUR/USD Forecast: Euro to continue to weaken as long as 1.1320 resistance holds About the US monthly jobs report The nonfarm payrolls released by the US Department of Labor presents the number of new jobs created during the previous month, in all non-agricultural business. The monthly changes in payrolls can be extremely volatile, due to its high relation with economic policy decisions made by the Central Bank. The number is also subject to strong reviews in the upcoming months, and those reviews also tend to trigger volatility in the forex board. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or bearish), although previous months reviews and the unemployment rate are as relevant as the headline figure.

Economist at UOB Group Ho Woei Chen, CFA, comments on the latest release of inflation figures in South Korea. Key Takeaways “Inflation rose unexpected

Economist at UOB Group Ho Woei Chen, CFA, comments on the latest release of inflation figures in South Korea. Key Takeaways “Inflation rose unexpectedly in November. Headline inflation accelerated to 3.7% y/y, 0.4% m/m (Bloomberg est: 3.1% y/y, -0.2% m/m), up from October’s 3.2% y/y, 0.1% m/m. This is a fresh decade high and marks the 8th consecutive month that the inflation rate is above Bank of Korea’s (BOK) 2% target.” “The core CPI (excluding agricultural products & oils) moderated to 2.3% y/y from 2.8% in October but was also a surprise increase against Bloomberg’s consensus of 2.2%. Compared to the previous month, core CPI rose 0.1% vs. 0.3% gain in October.” “With year-to-date inflation at 2.3% y/y, the average full-year inflation is likely to be 2.4% this year, slightly exceeding BOK’s revised forecast. The BOK raised its inflation forecast in November to 2.3% for 2021 (from 2.1%) and 2.0% for 2022 (from 1.5%). We expect headline inflation to stay above the BOK’s target in 1H22 before moderating in the later part of the year, partly due to the high comparison base.” “Given the surge in November inflation as well as sustained strength in its macroeconomic data, we continue to project the next BOK rate hike in 1Q22, likely at the February meeting.”

India Bank Loan Growth declined to 7% in November 15 from previous 7.1%

India FX Reserves, USD fell from previous $640.4B to $637.69B in November 26

Bank of England (BOE) policymaker Michael Saunders said on Friday that a key consideration for him at the December policy meeting will be the possible

Bank of England (BOE) policymaker Michael Saunders said on Friday that a key consideration for him at the December policy meeting will be the possible economic effects of the new Omicron variant, as reported by Reuters. Additional takeaways "It is likely that any rise in bank rate will be limited given that the neutral level of interest rates remains low." "Provided we do not delay too long, it should be a case of easing off the accelerator rather than applying the brakes." "Will need to consider the potential costs and benefits of waiting to see more data on this before – if necessary – adjusting policy." "Assumptions are uncertain, especially in light of the new Omicron variant." "It is within the range of possibilities that the new Omicron variant will significantly affect the economic outlook." "If the economy develops in line with the MPR central forecast or my expectations, the direction of travel for bank rate during the next few quarters is clearly likely to be upward." "Aggregate demand and supply could also both be affected by increased precautionary behaviour." "If easing is required, the MPC has options to support the economy if needed – but this is not my central expectation." "In considering if and when to adjust rates, there is always a case to wait and see more data." "Given Omicron has only been detected quite recently, there could be particular advantages in waiting to see more evidence." "Continued delay also could be costly." "Not convinced by the view that it would be possible to lift labour supply (or significantly lift overall potential output) by aiming to run the economy hot." "Delay on raising rates could require a more abrupt and painful policy tightening later. For me, the balance between these considerations is likely to be a key factor at the December meeting." Market reaction The GBP/USD pair extended its daily decline following these comments and was last seen losing 0.32% on the day at 1.3264.

Ireland Gross Domestic Product (YoY) down to 11.4% in 3Q from previous 21.6%

Ireland Gross Domestic Product (QoQ): 0.9% (3Q) vs previous 6.3%

Considering the view of FX Strategists at UOB Group, a near-term drop to 6.3525 in USD/CNH now seems to be losing traction. Key Quotes 24-hour view: “

Considering the view of FX Strategists at UOB Group, a near-term drop to 6.3525 in USD/CNH now seems to be losing traction. Key Quotes 24-hour view: “USD traded between 6.3687 and 6.3773 yesterday, narrower than our expected sideway-trading range of 6.3650/6.3800. The quiet price actions offer no fresh clues and further sideway-trading would not be surprising. Expected range for today, 6.3660/6.3810.” Next 1-3 weeks: “On Wednesday (01 Dec, spot at 6.3650), we held the view that USD could weaken to 6.3525. However, USD has not been able to make any headway on the downside as it traded in a quiet manner the past couple of days. Downward momentum has eased and the odds for USD to move lower to 6.3525 have diminished. On the upside, a break of 6.3880 (no change in ‘strong resistance’ level) would indicate that the downside risk has dissipated.”

USD/TRY advances further and records a new all-time high in the vicinity of 13.90 on Friday. USD//TRY looks to CBRT, intervention Following the record

USD/TRY fades an initial spike to the vicinity of 13.9000.Turkey’s inflation rose more than expected in November.The CBRT intervened once again in the FX markets.USD/TRY advances further and records a new all-time high in the vicinity of 13.90 on Friday. USD//TRY looks to CBRT, intervention Following the record tops, the Turkish central bank (CBRT) announced it directly intervened in the FX markets, always citing the “unhealthy price formations in exchange rates” as some sort of justification. Following the CBRT move, spot dropped to the 13.30 region as the lira (apparently) regained attraction. The lira, in the meantime, continues to suffer the lack of credibility in the CBRT, which keeps undermining the prospects for the currency in the longer run. That’s not even considering the persistent interference of politics in the design of the monetary policy by the CBRT. In addition, inflation figures in Turkey showed the CPI rose more than expected in November, this time 21.31% YoY and 3.51%, surpassing initial forecasts. Additionally, Producer Prices rose 9.99% inter-month and 54.62% over the last twelve months. USD/TRY key levels So far, the pair is losing 0.11% at 13.6106 and a drop below 12.3585 (low Dec.1) would open the door to 11.5451 (low November 24) and finally 11.4583 (20-day SMA). On the other hand, the next up barrier lines up at 13.8746 (all-time high Dec.1) followed by 14.0000 (round level).  

while speaking at an event organized by Reuters on Friday, BioNTech CEO Ugur Sahin said the new variant might be able to infect vaccinated people and

while speaking at an event organized by Reuters on Friday, BioNTech CEO Ugur Sahin said the new variant might be able to infect vaccinated people and people with high exposure to COVID-19. Additional takeaways "It's not clear if vaccinated people have sufficient protection to avoid severe disease from new variant, we anticipate vaccinated people will be protected from severe disease." "This new variant came earlier than I expected, I expected it sometime next year." "We have the ability to adapt COVID-19 vaccine relatively quickly." "We are confident that vaccinated people and those with booster shots will have sufficient protection against severe disease and may be any type of disease; we will know in a few weeks." "The higher rate of immune people, the better we are protected against COVID-19 having the ability to mutate." "I think we will need a new vaccine against COVID-19, it's a question of when we will need it." Market reaction These comments seem to be weighing on market sentiment. As of writing, US stock index futures were down between 0.3% and 0.4%.

The yuan has recently been very strong against the dollar even as the US Dollar Index has been rising. However, economists at ING expect the CNY to de

The yuan has recently been very strong against the dollar even as the US Dollar Index has been rising. However, economists at ING expect the CNY to depreciate against the USD through next year. Here are their three calls for China in 2022. State-Owned Enterprises to return as the core of investment entity “As intense policy actions are expected to be toned down, the pattern of economic growth should start to return to normal. But this will involve more reliance on State-Owned Enterprises (SOEs) to invest in infrastructure for renewable energy and technology. Private-owned enterprises (POEs) will play a role to facilitate these projects when SOEs contract out work to the private sector.” No change to the slight easing of monetary policy “Monetary policy is not likely to be relaxed unless it looks like economic growth is at serious risk, and the probability of this is low as the government can control the pace of investment growth. We believe that the likelihood that the People's Bank of China (PBoC) cuts policy rates or the Reserve Rate Requirement (RRR) is small.” Portfolio inflows via opening-up of the capital account “The opening-up of China’s capital account has attracted portfolio inflows. These inflows will slow if further opening in 2022 starts to look less likely. In this event, there will be more two-way portfolio flows depending on relative asset prices onshore versus offshore. This means the yuan could be volatile. And the tendency towards yuan depreciation in the face of an increasingly hawkish Fed will be significant. This should end up with a weaker yuan against the dollar by the end of 2022.”  

Economists at Barclays see limited scope for the pound to rally in the near-term and targets GBP/USD around 1.33 by year-end. Rising inflation into Q1

Economists at Barclays see limited scope for the pound to rally in the near-term and targets GBP/USD around 1.33 by year-end. Rising inflation into Q1 22 to undercut real rate support for the pound “Rising UK inflation is undercutting the positive impact of Bank of England rate hike expectations. The front-end of the UK OIS curve now looks reasonably priced to us. However, rising inflation into Q1 22 should undercut real rate support for the pound."  "Slowing growth and ongoing concerns about the EU-UK post-Brexit trading relationships will limit the ability for GBP to rally near-term. Further out, elevated levels of foreign acquisition and investment in UK assets should provide an undercurrent of support for GBP." “We expect the GBP/USD to hover around the 1.33 level by end-2021.”  

From fiscal reforms to wage growth to inflation; these are three significant challenges for the eurozone in 2022, according to economists at ING. Stil

From fiscal reforms to wage growth to inflation; these are three significant challenges for the eurozone in 2022, according to economists at ING. Still no fiscal reforms but silent power shift towards Brussels “We do not expect changes to the numerical fiscal rules but a shift towards a more pragmatic country-specific approach, balancing between debt sustainability and the need for investments. In the meantime, the frontloading of investments planned by the new German government will find many eurozone followers, postponing any austerity to 2023.” Expect a rebound in wage growth for 2022 “Labour shortages have returned far quicker than expected, improving workers’ bargaining power. The soaring inflation rate has already and will continue to result in higher wage demands from unions, while countries with inflation indexation will automatically see wages rise. Finally, strong profits give corporates room to increase salaries. We expect an increase to 3-3.5% in 2022, which is above the peak seen in 2019.” Inflation will fall below 2%, but the ECB’s medium-term target will be met “We agree with the ECB that the disappearing effect from the German VAT increase in 2021, an improvement of supply chain disruptions and a more favourable base effect for energy prices are likely to push inflation towards 2% in the second half of 2022. However, the output gap in the eurozone will turn positive next year and will be significantly marked in 2023 and beyond. The ECB’s staff forecasts from December 2022 are likely to show an inflation rate of around 2% over the forecasting horizon, a backdrop that would justify an initial rate hike in the first half of 2023.”  

The EUR/GBP cross maintained its bid tone through the first half of the European session and was last seen trading just above the 0.8500 round-figure

EUR/GBP gained some positive traction on Friday and snapped two days of the losing streak.Brexit-related uncertainties turned out to be a key factor behind the GBP’s underperformance.Divergent BoE-ECB monetary policy outlooks warrants caution for aggressive bullish traders.The EUR/GBP cross maintained its bid tone through the first half of the European session and was last seen trading just above the 0.8500 round-figure mark. Having touched a three-day low earlier this Friday, the EUR/GBP cross managed to gain some positive traction and recovered a part of the previous day's losses. Persistent Brexit-related uncertainties turned out to be a key factor behind the British pound's relative underperformance. This, in turn, assisted the cross to snap two consecutive days of the losing streak and stall this week's corrective pullback from the 0.8535-40 region. On the economic data front, a downward revision of the Eurozone Services PMI was offset by a rather unimpressive final UK Services PMI and did little to provide any meaningful impetus. That said, the divergent Bank of England and the European Central Bank monetary policy outlooks could hold back bullish traders from placing aggressive bets and cap gains for the EUR/GBP cross. This, in turn, warrants some caution for bullish traders. The BoE is widely expected to hike interest rates at its upcoming monetary policy meeting on December 16. Conversely, the ECB officials have been pushing back against market bets for tighter policy and talked down the need for any action to counter inflation. In fact, the ECB President Christine Lagarde said this Friday that it is very unlikely to see rate hikes next year and sees inflation moving back towards the target in course of 2022. Hence, it will be prudent to wait for some follow-through buying before positioning for an extension of the recent strong recovery move from the 0.8380 region, or the lowest level since February 2020 touched in November. However, the downside seems cushioned, at least for the time being, as investors assess the impact of the new and possible vaccine-resistant Omicron variant of the coronavirus on economic recoveries. Technical levels to watch  

GBP/USD has dropped below 1.3300 on renewed dollar strength. As FXStreet’s Eren Sengezer notes, technicals turn bearish as buyers fail to lift cable a

GBP/USD has dropped below 1.3300 on renewed dollar strength. As FXStreet’s Eren Sengezer notes, technicals turn bearish as buyers fail to lift cable above key hurdles ahead of US jobs report. Near-term technical outlook turns bearish “Investors forecast Nonfarm Payrolls (NFP) to rise by 550K. However, market participants will pay close attention to wage inflation. A stronger-than-anticipated print could trigger another leg higher in the US Dollar Index as it would reaffirm the Fed's tightening prospects.”  “Even if a disappointing jobs report weighs on the greenback, the dollar sell-off is likely to remain short-lived as Fed policymakers won't have enough time to adjust their commentary ahead of the blackout period that starts on Saturday.” “On the four-hour chart, GBP/USD trades below the 20-period and the 50-period SMAs. Additionally, the Relative Strength Index (RSI) indicator stays below 50, suggesting that sellers are starting to dominate the pair's action in the near-term.” “GBP/USD is testing 1.3280 static support. In case this level turns into resistance, the next target on the downside aligns at 1.3240 (static level) before 1.3200/1.3195 (psychological level/ November 30 low).”  “Resistances are located at 1.3300 (psychological level, 20-period SMA), 1.3320 (50-period SMA) and 1.3360 (static level).” See – NFP Preview: Forecasts from 10 major banks, strong print to reinforce Fed's recent hawkish pivot  

Eurozone’s Retail Sales rose by 0.2% MoM in October versus 0.2% expected and -0.4% last, the official figures released by Eurostat showed on Friday. O

Eurozone Retail Sales rose by 0.2% MoM in October vs. 0.2% expected.Retail Sales in the bloc stood at 1.4% YoY in October vs. 1.2% expected.Eurozone’s Retail Sales rose by 0.2% MoM in October versus 0.2% expected and -0.4% last, the official figures released by Eurostat showed on Friday. On an annualized basis, the bloc’s Retail Sales came in at 1.4% in October versus 2.6% recorded in September and 1.2% estimated. FX implicationsThe euro is holding onto its renewed upside on the mixed Eurozone Retail Sales data. At the time of writing, the major trades at 1.1300, modestly flat on the day. About Eurozone Retail Sales The Retail Sales released by Eurostat are a measure of changes in sales of the Eurozone retail sector. It shows the performance of the retail sector in the short term. Percent changes reflect the rate of changes of such sales. The changes are widely followed as an indicator of consumer spending. Usually, the positive economic growth anticipates "Bullish" for the EUR, while a low reading is seen as negative, or bearish, for the EUR.

European Monetary Union Retail Sales (MoM) in line with expectations (0.2%) in October

European Monetary Union Retail Sales (YoY) registered at 1.4% above expectations (1.2%) in October

Prospects of further decline in USD/JPY are expected to meet support in the mid-112.00s in the next weeks, suggested FX Strategists at UOB Group. Key

Prospects of further decline in USD/JPY are expected to meet support in the mid-112.00s in the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted yesterday that USD ‘could drift lower but a break of the major support at 112.50 is unlikely’. We added, ‘there is a minor support is at 112.65’. USD subsequently dipped to 112.64 before rebounding. Momentum indicators are turning neutral and USD is likely to trade sideways for today, expected to be within a range of 112.80/113.40.” Next 1-3 weeks: “There is not much to add to our update from Wednesday (01 Dec, spot at 113.40). We continue to hold the same view that USD could weaken further but 112.50 is expected to offer solid support.  On the upside, a breach of the ‘strong resistance’ level at 113.80 (level was at 114.00 yesterday) would indicate that USD is not ready to move below 112.50. Looking ahead, a clear break of 112.50 would shift the focus to 112.00.”

The UK services sector activity expanded less than expected in November, the final report from IHS Markit confirmed this Friday. The seasonally adjust

UK Final Services PMI downwardly revised to 58.5 in November.GBP/USD’s rebound remains capped below 1.33 on the UK data.Eyes on US NFP, ISM Services PMI ahead of the December Fed decision.The UK services sector activity expanded less than expected in November, the final report from IHS Markit confirmed this Friday.  The seasonally adjusted IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) was revised lower to 58.5 in November versus 58.6 expected and a 58.6 – last month’s flash reading. Key points Strongest increase in new work since June. Output growth eases slightly from October's three-month high. Input costs and prices charged rise at record rates in November. Tim Moore, Economics Director at IHS Markit, which compiles the survey “Surging price pressures have done little to dent business and consumer spending across the UK economy, according to the latest PMI data. New order growth hit a five-month high in November, job creation remained strong, and backlogs of work built up due to supply issues.” "The overall speed of recovery looks to have accelerated in comparison to the third quarter of 2021, with output growth mostly driven by services as manufacturers struggle with severe shortages of raw materials and critical components.” FX implicationsGBP/USD is fading its rebound on the downbeat UK data. The spot is trading at 1.3283, down 0.18% on the day.

United Kingdom Markit Services PMI came in at 58.5 below forecasts (58.6) in November

The USD/CAD pair was seen trading near the highest level since September, with bulls still awaiting a sustained move beyond the 1.2830-35 region. Foll

USD/CAD edged higher on Friday amid a modest pickup in the USD demand.A further recovery in oil prices could underpin the loonie and cap the upside.Traders now eye US/Canadian monthly jobs reports for some opportunities.The USD/CAD pair was seen trading near the highest level since September, with bulls still awaiting a sustained move beyond the 1.2830-35 region. Following the previous day's modest downtick, the USD/CAD pair caught fresh bids on the last day of a new week and was supported by the emergence of some US dollar buying. Growing market acceptance that the Fed would adopt a more aggressive policy response to contain stubbornly high inflation remained supportive of the prevalent bullish sentiment surrounding the greenback. In fact, investors started pricing in an eventual liftoff in June 2022 after Fed Chair Jerome Powell's hawkish comments during the congressional testimony earlier this week. Powell said the Fed needs to be ready to respond to the possibility that inflation may not recede in the second half of 2022. He added that the Fed is likely to speed up the tapering of its asset purchases. However, a generally positive risk tone held back traders from placing aggressive bullish bets around the safe-haven USD. On the other hand, a further recovery in crude oil prices, from the lowest level since August 23 touched in the previous day, underpinned the commodity-linked Canadian dollar. This, in turn, could act as a headwind for the USD/CAD pair and cap the upside. Investors might also prefer to move on the sidelines and wait for a fresh catalyst from Friday's key releases of monthly employment details from the US and Canada. The US economic docket also features the ISM Services PMI and influence the USD demand. Apart from this, traders will take cues from oil price dynamics for some short-term opportunities around the USD/CAD pair. Technical levels to watch  

Commodities, in general, are on course for their best annual performance in twenty years. But change is coming. Supply in many commodities is increasi

Commodities, in general, are on course for their best annual performance in twenty years. But change is coming. Supply in many commodities is increasing and any economic slowdown, covid-related or not, will weigh on prices. A higher US dollar and more tightening in monetary policy will also play a part, strategists at ING report. Oil market to return to surplus “We believe that we will see oil prices easing in 2022. Our expectation is that strong non-OPEC supply growth combined with a further easing in OPEC+ supply cuts will tip the global oil market back into surplus next year. As a result, we see ICE Brent averaging $76/bbl over the full year of 2022. The Omicron variant is a clear downside risk.” European gas tightness to persist “Concerns over low gas storage levels in Europe have not eased and this is likely to be a concern through the winter. These worries over tightness should mean that prices remain elevated, yet volatile for the remainder of this year and into early next year. We expect that European gas prices will start to ease once we are past the peak of winter demand, although we still believe that prices will remain seasonally high over much of 2022.” Aluminium to stand out in metals “Most metal markets should be better supplied in 2022 which suggests that prices will trend lower. Monetary tightening and a stronger US dollar should provide some further headwinds. However, aluminium is likely to be the outlier. While we will see some smelters bringing back capacity over the course of 2022, it will not be enough to alleviate the tightness in the market. As a result, we expect prices to average close to $3,000/t in 2022.”

USD/CAD is trading above the 1.2800 level. The pair is set to extend its advance towards the 1.2950/1.3020 neighborhood, in the view of economists at

USD/CAD is trading above the 1.2800 level. The pair is set to extend its advance towards the 1.2950/1.3020 neighborhood, in the view of economists at Société Générale. USD/CAD points higher while above 1.2600 “Daily MACD has entered positive territory which points towards further upside.” “The pair is expected to revisit the graphical hurdle of 1.2950/1.3020 consisting of August peak. If this is overcome, an extended up-move could take shape.” “Defending 1.2600 will be crucial for continuation in rebound.” See:  NFP Preview: Forecasts from 10 major banks, strong print to reinforce Fed's recent hawkish pivot Canadian Jobs Preview: Forecasts from five major banks, labour market to keep pressuring the BoC  

While expressing his take on the Japanese economy, OECD Secretary-General Mathias Cormann said that he believes Japan’s stimulus package will boost th

While expressing his take on the Japanese economy, OECD Secretary-General Mathias Cormann said that he believes Japan’s stimulus package will boost the strength of the economic recovery, but design and implementation will be important. Additional takeaways Japan is in a comparatively challenging position when it comes to the debt-to-GDP ratio. Japan’s debt-to-GDP ratio is too high. Important to boost economic growth to increase govt revenue, improve public service productivity to address fiscal consolidation. The best way to reduce the debt-to-GDP ratio is to strengthen the growth of the economy.USD/JPY Price Analysis: Makes another attempt to recapture 50-DMA ahead of NFP

10-year US Treasury yields struggled to overcome October peak of 1.70% resulting in retraction of recent gains. It broke below a multi-month ascending

10-year US Treasury yields struggled to overcome October peak of 1.70% resulting in retraction of recent gains. It broke below a multi-month ascending trend line and is now at projections of 1.40% after rising nearly 3% on Thursday. A break below here would up 1.29%, economists at Société Générale report. US 10-year Treasury yields to alleviate downside pressure above 1.60% “As long as recent bearish gap at 1.60% is not crossed, a short-term down move could persist.” “A break below 1.40% can lead to a deeper pullback towards revisit of August high near 1.37% and 1.29%.”  

Norway Registered Unemployment s.a came in at 80.13K, below expectations (82.2K) in November

European Monetary Union Markit Services PMI below expectations (56.6) in November: Actual (55.9)

European Monetary Union Markit PMI Composite registered at 55.4, below expectations (55.8) in November

Norway Registered Unemployment n.s.a below forecasts (2.2%) in November: Actual (2.1%)

Germany Markit Services PMI came in at 52.7, below expectations (53.4) in November

Germany Markit PMI Composite came in at 52.2 below forecasts (52.8) in November

European Central Bank (ECB) President Christine Lagarde said at the Reuters event that it is “very unlikely to see rate hikes in 2022.” "We stand read

European Central Bank (ECB) President Christine Lagarde said at the Reuters event that it is “very unlikely to see rate hikes in 2022.” "We stand ready in both directions," she added.    developing story ...

All eyes are on the participation rate of the November jobs report from the US as this will help the Federal Reserve to assess wage inflation pressure

All eyes are on the participation rate of the November jobs report from the US as this will help the Federal Reserve to assess wage inflation pressures. In any case, economists at MUFG Bank expect the US dollar to strengthen following the release of Nonfarm Payrolls data.  Wage inflation risks are key for the Fed and the US dollar “The pandemic has basically seen 3M people leave the labour market. If and/or when these missing 3M people return to the market will be key in determining wage inflation pressures and will be important for the Fed’s view on medium-term inflation risks.” “Whatever the outcome in today’s report is, the Fed has been left surprised and will likely push on with confirming a faster taper which we expect will result in USD crosses reverting back to pre-Omicron levels close to 97.00 on DXY. EUR/USD is likely to grind lower toward the 1.1000 level.” See – NFP Preview: Forecasts from 10 major banks, strong print to reinforce Fed's recent hawkish pivot

France Markit Services PMI came in at 57.4, below expectations (58.2) in November

France Markit PMI Composite came in at 56.1, below expectations (56.3) in November

"When conditions of the forward guidance are satisfied, we will not hesitate to act," European Central Bank (ECB) President Christine Lagarde said i a

"When conditions of the forward guidance are satisfied, we will not hesitate to act," European Central Bank (ECB) President Christine Lagarde said i an interview titled "Financing the Covid recovery with new economic headwinds" at the Reuters Next online conference. Further comments We cannot be riveted to short term, have to look at the direction of travel. more to come ...

Italy Markit Services PMI came in at 55.9, above forecasts (54.8) in November

The USD/CHF pair traded with a positive bias, around the 0.9215-20 region through the early European session, though the uptick lacked bullish convict

A combination of factors assisted USD/CHF to regain positive traction on Friday.A positive risk tone undermined the safe-haven CHF and extended some support.Sustained USD buying remained supportive ahead of the US monthly jobs report.The USD/CHF pair traded with a positive bias, around the 0.9215-20 region through the early European session, though the uptick lacked bullish conviction. The global risk sentiment stabilized a bit amid easing fears about the potential economic fallout from the new and possible vaccine-resistant Omicron variant of the coronavirus. Adding to this, the passage of a bill to fund the US government through mid-February further boosted investors' confidence. This was evident from a positive tone around the equity markets, which undermined the safe-haven Swiss franc and assisted the USD/CHF pair to attract some buying on the last day of the week. On the other hand, the US dollar remained well supported by firming expectations that the Fed will tighten its monetary policy sooner rather than later to contain stubbornly high inflation. Investors started pricing in the possibility of liftoff in June 2022 in reaction to Fed Chair Jerome Powell's hawkish comments. In his congressional testimony earlier this week, Powell said the Fed needs to be ready to respond to the possibility that inflation may not recede in the second half of 2022. Powell also added that the US central bank would consider a faster tapering of its bond purchases at the upcoming two-day meeting starting on December 14. Several FOMC members backed the case for speeding up the pace of withdrawing the pandemic-era stimulus. This was seen as a key factor that continued acting as a tailwind for the greenback. Bulls, however, seemed reluctant, rather preferred to wait on the sidelines ahead of Friday's release of the closely-watched US monthly jobs data. The popularly known NFP report will play a key role in influencing the near-term USD price dynamics and provide a fresh directional impetus to the USD/CHF pair. This makes it prudent to wait for a strong follow-through buying before confirming that the recent corrective pullback from a multi-month peak touched in November has run its course. Heading into the key data risk, any subsequent move up is more likely to confront stiff resistance near the weekly swing high, around the 0.9270-75 region. Technical levels to watch  

Economists at HSBC have changed their view on the Fed’s likely policy path. They expect faster tapering and earlier rate hikes. Dollar to benefit from

Economists at HSBC have changed their view on the Fed’s likely policy path. They expect faster tapering and earlier rate hikes. Dollar to benefit from the rate differential vs most other major currencies “We expect the tapering of bond purchases to go faster, which also allows earlier rate hikes. We believe the Fed will hike policy rates by 0.25% in June 2022, September 2022, March 2023 and September 2023.” “We note that the market has already priced in 2 hikes in 2022, and our 2023 assumptions are also close to the market’s expectations. Hence, we do not change our investment strategy, but think volatility will help quality stocks, the US dollar and hedge funds.” “The US dollar should continue to see mild upside. Even though the rate hikes are already expected, we think the dollar will benefit from the rate differential vs most other major currencies. Within EM FX, CNY should remain relatively resilient.”  

The European Central Bank (ECB) continues to believe inflation is a largely temporary phenomenon, the central bank policymaker Klaas Knot said on Frid

The European Central Bank (ECB) continues to believe inflation is a largely temporary phenomenon, the central bank policymaker Klaas Knot said on Friday.   more to come ...

The European currency trades without a clear direction and motivates EUR/USD to gyrate around the 1.1300 neighbourhood so far at the end of the week.

EUR/USD alternates gains with losses around the 1.1300 zone.Daily support emerges near 1.1280 so far on Friday.November’s Payrolls is expected at 550K and jobless rate at 4.5%.The European currency trades without a clear direction and motivates EUR/USD to gyrate around the 1.1300 neighbourhood so far at the end of the week. EUR/USD looks to US docket EUR/USD remains under some tepid downside pressure after hitting weekly tops in the 1.1380/85 band on November 30. The gradual recovery in the greenback coupled with fresh omicron concerns have put the pair under pressure in past sessions, all against the backdrop of persisting risk aversion mood among market participants. On the ECB front, Chairwoman Lagarde said there is uncertainty about how fast the new variant of the coronavirus could spread in the euro area, adding that another wave of the pandemic is already factored in in the ECB’s adverse scenario. Lagarde also noted the central bank sees inflation declining in 2022, while she expects energy prices to be substantially lower by end of the next year. Earlier, Board member Knot do not rule out an interest rate hike in 2023 in case inflation surpasses expectations next year. In the euro calendar, final November Services PMIs are due seconded by Retail Sales in the euro area. In the NA session, November’s Nonfarm Payrolls and the Unemployment Rate will be in the centre of the debate seconded by Factory Orders, the ISM Non-Manufacturing and the final Services PMI tracked by Markit. What to look for around EUR EUR/USD manages well to keep the trade above the 1.1300 mark amidst an erratic week so far. The corrective downside in the greenback propped up the recent move higher in spot, although this is regarded as temporary. Fresh coronavirus concerns sparked after the new variant omicron was discovered last week is likely to keep the demand for the safe haven on the raise at least in the very near term. In the meantime, the outlook for the European currency remains well into the bearish territory on the back of the ECB-Fed policy divergence, increasing COVID-19 cases in Europe as well as some loss of momentum in the economic recovery in the euro area, as per some weakness observed in key fundamentals.Key events in the euro area this week: EMU/Germany Final Services PMIs, ECB’s Lagarde (Friday).Eminent issues on the back boiler: Asymmetric economic recovery post-pandemic in the region. Increasing likelihood that elevated inflation could last longer. Pick-up in the political effervescence around the EU Recovery Fund in light of the rising conflict between the EU, Poland and Hungary on the rule of law. ECB tapering speculations. EUR/USD levels to watch So far, spot is losing 0.08% at 1.1292 and faces the next up barrier at 1.1382 (weekly high November 30) followed by 1.1464 (weekly high Nov.15) and finally 1.1519 (55-day SMA). On the other hand, a break below 1.1186 (2021 low Nov.24) would target 1.1185 (monthly low Jul.1 2020) en route to 1.1168 (low Jun.19 2020).  

European Central Bank (ECB) President Christine Lagarde is making some comments on inflation outlook while speaking in an interview titled "Financing

European Central Bank (ECB) President Christine Lagarde is making some comments on inflation outlook while speaking in an interview titled "Financing the Covid recovery with new economic headwinds" at the Reuters Next online conference. Additional comments The euro area is different from the US if you look at inflation, labour market, slack. Inflation profile looks like hump. We see inflation going towards target in course of 2022. We're at high level of hump.

The TWD strengthened by around 0.4% against the US dollar in November. However, as Taiwan’s growth of export orders is set to decline, economists at M

The TWD strengthened by around 0.4% against the US dollar in November. However, as Taiwan’s growth of export orders is set to decline, economists at MUFG Bank expect the USD/TWD pair to advance nicely through the next year. Depreciation bias for TWD against USD till end of 2022 “For the medium term, we expect Taiwan’s exports growth to be on a trend decline till the end of 2022. Further decline in semi-conductor prices would add pressure on the nominal value of exports as well.”  “China, one of Taiwan’s major exports destination, will experience a sizable GDP growth deceleration from this year’s around 8% YoY growth to about 5-5.5% YoY in 2022, which would imply a much weaker incremental demand for Taiwan goods in 2022.”  “Other factors, including higher US rates, stronger Taiwan capital outflow as more of Taiwan’s insurance allocate to US assets, would also add pressure on TWD.”  

“We don't know if current vaccines resistant to Omicron”, European Central Bank (ECB) President Christine Lagarde said in an interview titled "Financi

“We don't know if current vaccines resistant to Omicron”, European Central Bank (ECB) President Christine Lagarde said in an interview titled "Financing the Covid recovery with new economic headwinds" at the Reuters Next online conference. Additional quotes We don't know how fast Omicron will propagate in euro area. Economic impact will depend on measures. I don't see any reason why we would not draw from learnings to live with variant. We should be on alert, take confidence from past. Another wave was included in ECB's adverse scenario, we're still in range.

EUR/CHF has been declining since mid-September, with the cross currently trading at the lowest level since 2015. Economists at Danske Bank think there

EUR/CHF has been declining since mid-September, with the cross currently trading at the lowest level since 2015. Economists at Danske Bank think there is room for further decline as relative CPI diverges further. The risks are FX intervention by the SNB and global yield curve steepening “We believe there is still room left for further declines as 1) price levels diverge further, 2) SNB will let CHF appreciate on fundamentals, and 3) we see a low risk of a duration shock to the long end of global yields.” “The key risk is an FX intervention from the SNB in order to avoid EUR/CHF from declining too much. Additionally, the safe-haven currency could face headwinds if global yield curves steepen amid a shift in the global investment environment with global inflation pressures fading and/or renewed surge in global industry.”  

According to UOB Group’s FX Strategists, further retracements in AUD/USD are likely to meet a solid support around 0.7050 in the short term. Key Quote

According to UOB Group’s FX Strategists, further retracements in AUD/USD are likely to meet a solid support around 0.7050 in the short term. Key Quotes 24-hour view: “We highlighted yesterday that ‘downward momentum has improved a tad’ and we expected AUD to ‘to trade with a downward bias towards 0.7075’. Our expectations did not materialize as AUD edged to a low of 0.7084. The downward bias appears to be intact and a breach of 0.7075 would not be surprising. However, the major support at 0.7050 is likely out of reach. Resistance is at 0.7115 followed by 0.7130.” Next 1-3 weeks: “There is no change in our view from Wednesday (01 Dec, spot at 0.7135). As highlighted, the downside risk in AUD is still intact but any further weakness is likely limited to a test of 0.7050. On the upside, a breach of 0.7165 (‘strong resistance’ level was at 0.7205 yesterday) would indicate that AUD weakness from early last week has run its course.”

Canadian employment figures are due out on Friday. Labour market is set to keep pressuring the Bank of Canada, as a sharp uptick in wages is expected,

Canadian employment figures are due out on Friday. Labour market is set to keep pressuring the Bank of Canada, as a sharp uptick in wages is expected, proving persistent inflation. In the view of economists at ING, the USDC/AD pair could drop to 1.26 by year-end. Labour market gains in November with another 30K jobs added “The pace of hiring was understandably slower in October following the very strong summer gains, and markets are likely expecting another read around +30K. A greater focus is being put on wage growth: more indications of upward pressure on wages will easily fit the narrative that inflation in Canada should prove quite persistent.” “The BoC is set to continue facing the pressure from domestic data although the developments on the virus side naturally hold the key for the policy response in the near-term.” “Given the high beta to sentiment and commodities, any view on CAD is strictly dependent on incoming news about the danger associated with the new variant, but if we exclude a return to draconian measures in highly-vaccinated communities, we think USD/CAD can gradually decline towards 1.2600 into year-end.” See – Canadian Jobs Preview: Forecasts from five major banks, labour market to keep pressuring the BoC

Spain Markit Services PMI above expectations (58.8) in November: Actual (59.8)

EUR/USD spent most of the time rising with the post-covid recovery in 2020. This has reversed during 2021 and economists at Danske Bank expect such re

EUR/USD spent most of the time rising with the post-covid recovery in 2020. This has reversed during 2021 and economists at Danske Bank expect such reversal to continue playing out in 2022.  2022 is likely to bring more of the most recent history “European institutions are conducting a EUR-negative policy in their fight against COVID-19, which will have negative ramifications beyond the Covid-19 crisis itself. Furthermore, global growth expectations are most likely to be revised lower and equities will probably continue to show a high preference for strong fundamentals via ‘quality’ – this is USD-positive.” “Irrespective of the large move seen in EUR/USD during H2 2021, we see more to come as liquidity tightens, global growth expectations increasingly peak and the market sees more asymmetry between EUR and USD across factors such as economic dynamism, predictability, relative equities, political stability, and many more areas.” “The key risk is a scenario where global yield curves steepen amid outperformance in European and EM equities alike would probably also be consistent with upside risk in EUR/USD. Such could come if inflation fades, central banks add economic support, and global demand rises from its current high levels as supply limitations disappear.”  

The NZD/USD pair edged lower during the early European session and dropped back closer to the YTD low, around the 0.6780-75 region in the last hour. F

The emergence of some USD buying prompted fresh selling around NZD/USD on Friday.Hawkish Fed expectations turned out to be a key factor that acted as a tailwind for the USD.Investors look forward to the latest US monthly jobs report for some meaningful impetus.The NZD/USD pair edged lower during the early European session and dropped back closer to the YTD low, around the 0.6780-75 region in the last hour. Following some two-way price moves since the beginning of this week, the NZD/USD pair met with a fresh supply on Friday and now seems all set to prolong a one-month-old bearish trend. The US dollar gained some positive traction for the third successive day and remained well supported by hawkish Fed expectations. This, in turn, was seen as a key factor that dragged the pair lower on the last day of the week. Investors now seem convinced that the Fed would adopt a more aggressive policy response to contain stubbornly high inflation. In fact, the money markets indicate that the Fed could begin liftoff in June and hike rates thrice in 2022. The bets increased further after Fed Chair Jerome Powell said that it's time to retire the word transitory and consider wrapping up the taper of our asset purchases, perhaps a few months sooner. Apart from the prevalent bullish sentiment surrounding the USD, the disappointing release of Chinese Caixin Services PMI further undermined antipodean currencies, including the kiwi. That said, signs of stability in the equity markets could help limit deeper losses for the NZD/USD pair. Traders might also refrain from placing aggressive bets ahead of Friday's release of the closely-watched US monthly employment details. The popularly known US NFP report is expected to show that the economy added 550K new jobs in November and that the unemployment rate dipped to 4.5% from 4.6%. The data will play a key role in influencing the USD and provide some impetus to the NZD/USD pair. Traders will further take cues from developments surrounding the coronavirus saga and the broader market risk sentiment to grab some short-term opportunities around the major. Technical levels to watch  

Statistics Canada will publish the Canadian November labour market data at 13:30 GMT and as we get closer to the release time, here are forecasts from

Statistics Canada will publish the Canadian November labour market data at 13:30 GMT and as we get closer to the release time, here are forecasts from economists and researchers at five major banks regarding the upcoming employment data. The Unemployment Rate in Canada is expected to remain drop to 6.6% from 6.7% at 6.9% with the Net Change in Employment coming in at 35K. TDS “We look for another modest (30K) performance, pulling the UE rate lower to 6.6%, but expect a more substantial pickup in wage growth.” RBC Economics “We expect a 40K increase in Canadian employment in October, lowering the unemployment rate to 6.6%. The improvement was likely supported by the ongoing recovery of close-contact service sector industries, where employment is still weaker than pre-pandemic but demand continues to resume.” NBF “Hiring should have continued at a strong pace in the month, as the epidemiological situation allowed the economic re-opening to continue. Our call is for a 30K increase in employment, a gain that would keep the unemployment rate unchanged, assuming the participation rate gained a tick at 65.4%.” CIBC “We are only penciling in an addition of 10K jobs for the month, which would likely see the unemployment rate rise at least a tick to 6.8%.” Citibank “Canada Net Change in Employment – Citi: 85K, median: 40K, prior: 31.2K; Unemployment Rate – Citi: 6.4%, median: 6.6%, prior: 6.7%; Hourly Wage Rate Permanent Employees – Citi: 3.0%, median: NA, prior: 2.1% – We expect a return of stronger job growth in Canada though with downside risks if anecdotes of labor shortages materialize. In particular, a pick-up in wage growth, likely over the next 4-5 months of data, would be a convincing sign of a tighter labor market that supports a hike by the BoC in April.”

Economists at Danske Bank think markets are pricing in too many rate hikes from the Bank of England (BoE) short-term. Furthermore, a hit to overall ri

Economists at Danske Bank think markets are pricing in too many rate hikes from the Bank of England (BoE) short-term. Furthermore, a hit to overall risk sentiment and rising Brexit uncertainties may also weigh on GBP/USD.  The key risk is a shift in the global investment themes “We believe the current USD-positive investment environment will continue in 2022. Global growth is slowing, liquidity and monetary conditions are tightening, and there is a higher preference for USD assets, which (among other things) are supporting USD. This is usually also an environment where GBP benefits but we think it will benefit USD more than GBP.”  “Both the Fed and the BoE are on track tightening monetary policy. We believe, however, that market pricing is too aggressive on the BoE and too soft on the Fed. We are having a hard time seeing why the BoE should outpace the Fed, as the US economy is in better shape and underlying inflation pressure in the US is higher. Hence, we expect relative rates to weigh on GBP/USD.” “GBP/USD is likely to move lower if markets are hit by a risk sell-off. Another factor to look out for is the EU-UK negotiations on the implementation of the Northern Ireland protocol. While we expect neither the EU nor the UK to use the nuclear options, we will not be surprised if tensions rise, which may weigh on GBP/USD.” “If high inflation fades faster than we expect, if central banks get more accommodative (or stop tightening as fast as currently expected) and if we see a turn in the manufacturing cycle, we could see GBP/USD moving higher. The same goes if the BoE is forced to step on the brake to stop high inflation.”  

France Industrial Output (MoM) above expectations (0.5%) in October: Actual (0.9%)

France Budget rose from previous €-175.12B to €-171.62B in October

EUR/USD is sitting exactly in the middle of what could prove a multi-week 1.1180-1.1380 trading range – bordered by Omicron and Fed news. In the view

EUR/USD is sitting exactly in the middle of what could prove a multi-week 1.1180-1.1380 trading range – bordered by Omicron and Fed news. In the view of economists at ING, the November US jobs release could drag the pair down to the lower end of the range on a strong report. EUR/NOK unlikely to hold above 10.30 for long “While a strong NFP report today could see the lower end of the 1.1180-1.1380 range tested, investors may be reluctant to chase the move too much lower for fear of some more damaging Omicron news or uncertainty about the European Central Bank's attitude to inflation and ending emerging QE schemes when it meets on Thursday, December 16. That certainly is going to be a big meeting.” “News of further lockdowns across continental Europe hardly proffers the euro as a safe haven currency of choice and one suspects that EUR/JPY stays under pressure. And while it is not a very fashionable view, we doubt EUR/NOK holds above these 10.30+ levels for long. We forecast Brent averaging close to $75/bl next year, which should keep the undervalued NOK in demand on any near-term weakness.” See – NFP Preview: Forecasts from 10 major banks, strong print to reinforce Fed's recent hawkish pivot  

The US Bureau of Labor Statistics (BLS) will release the November jobs report on Friday, December 3 at 13:30 GMT and as we get closer to the release t

The US Bureau of Labor Statistics (BLS) will release the November jobs report on Friday, December 3 at 13:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of 10 major banks regarding the upcoming employment data. Following an increase of 531,000 in October, investors expect Nonfarm Payrolls to rise by 550,000 in November. Westpac “A gain of around 550K is expected, and there is again the possibility of further upward revisions. Gains around this level on an ongoing basis are more than enough to see maximum employment attained by end-2022, all the more so if participation holds well below its pre-pandemic level. This brings us to the policy outlook. The potential wage and inflation impact of a robust unemployment downtrend and constrained labour supply are likely to see the FOMC speed up the taper at their December meeting.”  ING “Nonfarm Payrolls are expected to post another sizeable increase of over 500K – we expect 550K – given that we know there is unsatiated demand out there for workers and we are hopeful that the supply of potential staff is increasing.” TDS “Along with our +650K forecast for payrolls, we forecast a 0.2pt decline in the unemployment rate and a 0.4% MoM (5.0% YoY) rise in hourly earnings.” NBF “Hiring should have continued at a strong pace in the month, as the epidemiological situation allowed the economic re-opening to continue. Layoffs, meanwhile, could have gone down a bit, judging from a decrease in initial jobless claims between the October and November reference periods. All told, payrolls may have increased 475K in the eleventh month of the year.”  CIBC “With job vacancies still close to record highs, the US labor market likely created 550K jobs in October. The unemployment rate likely fell by a tick, to 4.5%, leaving it a few ticks below the Fed’s projection for the end of the year, and only 0.7%-pts away from its end of 2022 projection. We likely are not far enough above the consensus to see a sustained market reaction.” SocGen “NFP are likely to add another half-million workers (515K) in November. We expect strong gains in many service sector categories, particularly in entertainment and travel. The unemployment rate can drop further. We expect a decline to 4.3% in November on the basis of strong job gains. The risk is that more people are returning to the workforce because they are spending their enhanced unemployment benefits. Such a phenomenon captures some workers but we do not see that as the key factor behind low labor participation rates.”  Wells Fargo “In terms of the November employment report, we look for a 600K gain, which is above consensus expectations.” Citibank “US November Nonfarm Payrolls – Citi: 450K, median: 500K, prior: 531K; Private Payrolls – Citi: 480K, median: 525K, prior: 604K; Average Hourly Earnings MoM – Citi: 0.4%, median: 0.4%, prior: 0.4%; Average Hourly Earnings YoY – Citi: 5.0%, median: 5.0%, prior: 4.9%; Unemployment Rate – Citi: 4.4%, median: 4.5%, prior: 4.6% – We expect a somewhat softer increase in jobs than the 531K gained in October but with substantial 2-sided risks. Average hourly earnings should rise with upside risks and the team also expects the unemployment rate to fall to 4.4% with labor force participation expected to return only slowly.” Danske Bank “We expect around 500K new jobs were created in line with the consensus estimate of 550K. More than that will increase the probability that the Fed will increase the tapering pace. Also worth keeping an eye on will be wage growth and whether people are returning to the jobs market, which will give new indications on what we can expect of inflation going forward.” Deutsche Bank “We are looking for NFP to grow by +600K, which would be the fastest pace of job growth since July, and that in turn would take the unemployment rate down to a post-pandemic low of 4.4%.”

The Singapore dollar was among the Asian currencies that underperformed against the US dollar in November. USD/SGD closed at 1.3694 at the end of Nove

The Singapore dollar was among the Asian currencies that underperformed against the US dollar in November. USD/SGD closed at 1.3694 at the end of November, up from October’s close at 1.3488. Some volatility is expected for the SGD into year-end, amid a strengthening bias, but several factors are supportive against further SGD weakness in 2022, economists at MUFG Bank report. Inflationary pressures fuel expectations towards tighter monetary policy  “We forecast USD/SGD at 1.3700 at end-2021, with some potential volatility.” “Singapore’s economic recovery is gathering steam, as it continues to reopen its economy and as activity levels normalize. However, the Omicron variant is an immediate concern and Singapore may have to take some steps back before moving forward again.”  “We now expect the MAS to further tighten monetary policy in April 2022, by appreciating the SGD NEER policy band by an estimated 1% p.a. then. This is likely due to broad inflationary pressures, which was a factor in MAS’ move in October. The appreciation policy bias of the SGD NEER should be supportive for the SGD.”  “We forecast USD/SGD moving lower to 1.3400 at end-2022.”  

The GBP/USD pair edged lower during the early European session and dropped to a fresh daily low, around the 1.3275 region in the last hour. The pair s

GBP/USD witnessed some selling on Friday amid the emergence of fresh USD buying.Rising Fed rate hike bets was seen as a key factor that acted as a tailwind for the USD.Investors look forward to the US monthly jobs report for a fresh directional impetus.The GBP/USD pair edged lower during the early European session and dropped to a fresh daily low, around the 1.3275 region in the last hour. The pair struggled to capitalize on this week's recovery from sub-1.3200 levels or the YTD low set on Tuesday and has been oscillating in a narrow trading band over the past three trading sessions. The UK-EU impasse over the Northern Ireland Protocol and the worsening row over the post-Brexit fishing rights between France and Britain turned out to be a key factor that acted as a headwind for the British pound. This, along with the emergence of some US dollar buying, prompted some selling around the GBP/USD pair on the last day of the week. The greenback continues to draw support from firming expectations that the Fed would tighten its monetary policy sooner rather than later to contain stubbornly high inflation. In fact, the money markets started pricing in the possibility of liftoff in June 2022 in reaction to Fed Chair Jerome Powell's hawkish comments earlier this week. In his congressional testimony, Powell said that the Fed is likely to speed up the tapering of its asset purchases. Several FOMC members also backed the case for a faster pace of rolling back the pandemic-era stimulus. That said, mixed performance in the equity markets could hold back traders from placing aggressive bullish bets around the safe-haven greenback. The market risk sentiment stabilized a bit amid easing fears about the economic impact of the new and possible vaccine-resistant Omicron variant of the coronavirus. This, along with the passage of a bill to fund the US government through mid-February, further boosted investors' confidence. Traders might also prefer to move on the sidelines ahead of Friday's release of the closely-watched US monthly jobs data. The popularly known NFP report will play a key role in influencing the USD price dynamics and provide some meaningful impetus to the GBP/USD pair later during the early North American session. Apart from this, trades will further take cues from developments surrounding the coronavirus saga and Brexit-related headlines to grab some short-term opportunities around the major. Technical levels to watch  

How effective covid vaccines are against the new Omicron variant will be known in a few days, as urgent studies to understand that have already begun,

How effective covid vaccines are against the new Omicron variant will be known in a few days, as urgent studies to understand that have already begun, Ana-Maria Henao-Restrepo, World Health Organization’s (WHO) scientist, said late Wednesday. Key quotes Some 450 researchers around the world have begun work to isolate the highly mutated variant from patient specimens, grow it in the lab, verify its genomic sequence, and establish methods to test it in blood-plasma samples, “They hope that this will happen within days, but I think we should not put pressure that it should happen within three days -- we should say it will happen within the next two weeks.” Related readsForex Today: Dollar creeps higher as focus shifts to November Nonfarm PayrollsOmicron Covid Update: Risk takes a hit as new variant grips the US

Turkey Producer Price Index (YoY) increased to 54.62% in November from previous 46.31%

Turkey Producer Price Index (MoM) up to 9.99% in November from previous 5.24%

Turkey Consumer Price Index (MoM) registered at 3.51% above expectations (3%) in November

Turkey Consumer Price Index (YoY) registered at 21.31% above expectations (20.7%) in November

Gold slumped to its weakest level in a year at $1,761 on Thursday but recovered above $1,770 early Friday. Will XAU/USD break critical $1,760 support

Gold slumped to its weakest level in a year at $1,761 on Thursday but recovered above $1,770 early Friday. Will XAU/USD break critical $1,760 support on US NFP? A robust report will weigh on the yellow metal, FXSTreet’s Dhwani Mehta reports. Strong NFP figures to embolden Fed’s tightening calls despite Omicron woes  “Friday’s critical US Nonfarm Payrolls data could cement an increased pace of tapering at the December FOMC decision, which may trigger a brief US dollar rally. As a result, gold could breach the key support of around $1,760 to test the next psychological cushion at $1,750.” “If the market sentiment worsens on intensifying Omicron covid concerns, then the yellow metal could find some support from the risk-off flows-driven renewed weakness in the yields.” “On the upside, the confluence of the 50, 100 and 200-DMAs at $1,792 needs to be cracked to initiate a meaningful recovery from monthly lows. The next upside target is seen at the $1,800 mark. The further recovery could call for a retest of Wednesday’s high at $1,809, above which the previous month’s high at $1,814 will be put to test.” “On the downside, a sustained break below the falling trendline support at $1,763, will seek a test of the November 3 low of $1,759. Further south, the $1,750 psychological level will challenge the bullish commitments.”  

USD/ZAR traders struggle for a clear direction below $16.00, consolidating the previous day’s losses around $15.95 during early Friday morning in Euro

USD/ZAR picks up bids to pare intraday losses.South African Health Minister Phaahla says fourth wave can be managed, Top Epidemiologist Groome sounds worrisome.Yields stay pressured amid-NFP caution, contrasting catalysts and a light calendar in Asia.USD/ZAR traders struggle for a clear direction below $16.00, consolidating the previous day’s losses around $15.95 during early Friday morning in Europe. The South African currency (ZAR) pair dropped the previous day amid hopes of finding a cure to the native variant of the coronavirus, backed by the UK’s approval to SOTOVIMAB trials. However, the recent comments from Health Minister Joseph Phaahla and Top Epidemiologist Michelle Groome add to the market’s confusion during the generally observed pre-NFP trading lull. Earlier in the day, South African Health Minister Phaahla said, per Reuters, “on Friday the country was entering its fourth wave of COVID-19 infections due to the Omicron variant, but hospitals were not under threat at this stage.” “Infections with the new variant were now present in seven out of the country's nine provinces, and hoped that the variant could be managed without causing too many deaths,” added Phaahla. Alternatively, the nation’s top scientist Groome said, “We are seeing an unprecedented rise in new cases in a short time.” Adding to the worrisome comments, the South African Epidemiologist said, “Reproductive number associated with omicron is very high in Gauteng province at over 2, highest ever since start of pandemic.” On the other hand, US Treasury yields bounced off a 10-week low the previous day on hawkish Fedspeak and firmer job-linked data. However, the Senate’s ability to avoid the government shutdown and rising numbers of COVID-19 strain in the US seems to weigh on the bond coupons, as well as the US Dollar Index (DXY), of late. Moving on, USD/ZAR traders will pay close attention to the Omicron updates and the US jobs report for fresh impulse. However, the bulls are likely to remain hopeful considering increasing odds of the Fed rate hike and South African virus woes. Technical analysis USD/ZAR moves are likely restricted between a three-week-old rising support line and a descending resistance trend line from November 26, respectively around $15.85 and $16.10.  

The AUD/USD pair remained depressed heading into the European session and was last seen flirting with the YTD low, around the 0.7065 region. The pair

AUD/USD witnessed some selling for the fourth successive day and retested YTD low on Friday.Disappointing Chinese PMI, concerns about US-China tensions exerted pressure on the aussie.A positive risk tone could help limit losses amid a subdued USD demand and ahead of the NFP.The AUD/USD pair remained depressed heading into the European session and was last seen flirting with the YTD low, around the 0.7065 region. The pair witnessed some selling for the fourth successive day and dropped to retest the lowest level since November 2020 during the early part of the trading action on Friday. A slight disappointment from the Caixin Chinese Services PMI, along with renewing concern about US-China tensions turned out to be a key factor that exerted pressure on the China-proxy Australian dollar. A private survey showed that activity in China's services sector expanded at a slower pace in November amid rising inflationary pressures and continuing small-scale COVID-19 outbreaks. Adding to this, news that China's ride-hailing giant Didi has begun preparations to withdraw from US stock exchanges gave some jitters over the uncertainty as to how this will impact the broader US-China relations. However, a generally positive risk tone could help limit any deeper losses for the AUD/USD pair, at least for the time being, amid a subdued US dollar price action. The market sentiment stabilized a bit on the back of easing fears about the potential economic fallout from the new and possible vaccine-resistant Omicron variant of the coronavirus first detected in South Africa. Adding to this, the passage of a bill to fund the US government through mid-February further boosted investors' confidence. That said, growing market acceptance that the Fed would adopt a more aggressive policy response to contain stubbornly high inflation might continue to act as a tailwind for the USD. This, in turn, warrants some caution before confirming that the AUD/USD pair has bottomed out. Investors might also prefer to move on the sidelines and wait for a fresh catalyst from Friday's release of the closely-watched US monthly jobs data. The popularly known NFP report will play a key role in influencing the USD price dynamics and provide some impetus to the AUD/USD pair. Traders will further take cues from the broader market risk sentiment to grab some short-term opportunities. Technical levels to watch  

In opinion of FX Strategists at UOB Group, Cable remains poised to extend the decline in the near term. Key Quotes 24-hour view: “Yesterday, we highli

In opinion of FX Strategists at UOB Group, Cable remains poised to extend the decline in the near term. Key Quotes 24-hour view: “Yesterday, we highlighted that GBP ‘could dip to 1.3240 before the risk of a rebound would increase’. Our expectations did not materialize as GBP traded in a relatively quiet manner between 1.3265 and 1.3333. Momentum indicators are turning neutral and GBP is likely to trade sideways for today, expected to be between 1.3270 and 1.3350.” Next 1-3 weeks: “There is not much to add to our update from Wednesday (01 Dec, spot at 1.3295). We continue to hold the same view that while further GBP weakness is not ruled out, 1.3195 is a solid support and may not be easy to crack. On the upside, a break of 1.3390 (no change in ‘strong resistance’ level from yesterday) would indicate that the weakness in GBP from early last week has run its course.”

USD/JPY is trading better bid above 113.00, having caught a fresh bid below the latter over the last hours. The recovery in the risk sentiment has wei

USD/JPY regains 113.00 and beyond amid a recovery in Treasury yields. US dollar remains lacklustre in pre-NFP trading amid looming Omicron risks. 50-DMA is the level to beat for the bulls to initiate a sustained recovery. USD/JPY is trading better bid above 113.00, having caught a fresh bid below the latter over the last hours. The recovery in the risk sentiment has weighed on the demand for the safe-havens such as the yen, Treasury bonds etc, triggering a fresh rebound in the yields across the curve. The renewed uptick in the US rates has underpinned the pair’s bounce. The spot looks to build on Thursday’s upswing from near monthly lows of 112.53, as the Fed’s hawkish tilt and upbeat NFP expectations keep the downside cushioned in the Treasury yields, as well as, the US dollar. Meanwhile, investors ignore Japan’s pledge to deploy necessary fiscal spending next year, as all eyes remain on the US payrolls and ISM Services PMI due later this Friday. USD/JPY’s daily chart shows that the price continues to face stiff resistance at the upward-sloping 50-Daily Moving Average (DMA), currently at 113.41. With the renewed upside, the spot looks to recapture the latter. Although a daily closing above the 50-DMA is needed to initiate a meaningful recovery towards the mildly bearish 100-DMA at 113.92. USD/JPY: Daily chart The 14-day Relative Strength Index (RSI), however, remains below the midline, threatening the bullish attempts. The rejection once again at the 50-DMA hurdle could expose the monthly lows once again, below which a sell-off towards the ascending 100-DMA at 111.64 cannot be ruled out. USD/JPY: Additional levels to consider  

The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, trades on a steady fashion just above the 96.00 yardstick

DXY trades within a tight range in the low-96.00s.US yields trade in a mixed note on Friday.All the attention will be on the Nonfarm Payrolls.The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, trades on a steady fashion just above the 96.00 yardstick on Friday. US Dollar Index looks to data The index looks to extend the weekly recovery amidst the persistent cautiousness among market participants ahead of the key release of the monthly US labour market report. Further support for the dollar came after several Fed-speakers (Bostic, Daly, Mester, Quarles, Barkin) reinforced on Thursday the idea of a faster tapering pace as well as a sooner-than-anticipated rates lift-off. Friday’s price action in the dollar so far comes amidst the mixed performance in the US cash markets, where yields of the 2y note climb past 0.62%, while yields of the 10y and 30y notes trade within a mild downside pressure. Later in the session, the November’s Nonfarm Payrolls will take centre stage seconded by the Unemployment Rate, Factory Orders, the ISM Non-Manufacturing and Markit’s final Services PMI. What to look for around USD The dollar reclaimed the 96.00 mark and looks to extend the weekly recovery albeit at a glacial pace. The re-emergence of the risk aversion in response to omicron concerns, Fedspeak supportive of a quicker tapering pace and the likeliness of a Fed’s move on rates earlier than estimated continue to lend support to the buck against the backdrop of an inconclusive performance in US yields across the curve and the “higher-for-longer” narrative around current elevated inflation pressures.Key events in the US this week: Nonfarm Payrolls, Unemployment Rate, Factory Orders, ISM Non-Manufacturing (Friday).Eminent issues on the back boiler: US-China trade conflict under the Biden’s administration. Debt ceiling issue. Geopolitical risks stemming from Afghanistan. US Dollar Index relevant levels Now, the index is gaining 0.05% at 96.18 and a break above 96.93 (2021 high Nov.24) would open the door to 97.00 (round level) and then 97.80 (high Jun.30 2020). On the flip side, the next down barrier emerges at 95.51 (weekly low Nov.30) followed by 94.96 (weekly low Nov.15) and finally 94.44 (low Nov.18).

Here is what you need to know on Friday, December 3: The US Dollar Index closed the second straight day modestly higher on Thursday and holds its grou

Here is what you need to know on Friday, December 3: The US Dollar Index closed the second straight day modestly higher on Thursday and holds its ground early Friday as investors gear up for the November jobs report from the US. Investors expect Nonfarm Payrolls to rise by 550,000 following October's increase of 531,000. October Retail Sales data for the euro area, Canadian employment figures and the ISM Services PMI survey from the US will be featured in the economic docket as well.  Risk flows dominated the financial markets on Thursday and Wall Street's main indexes managed to register impressive gains. The US Senate has voted to approve the bill to avert a government shutdown over the weekend. Meanwhile, Bloomberg reported that a recently conducted research in the UK found that most of the booster shots were able to increase the antibodies against the Omicron variant. Moreover, GlaxoSmithKline said Its COVID-19 antibody drug, Sotrovimab, was likely effective against the new variant. US stocks futures are trading in the early European session and the 10-year US Treasury bond yield is moving sideways near 1.44% after rising nearly 3% on Thursday. In an interview with the Financial Times, Cleveland Fed President Loretta Mester noted that the economy was better at dealing with new coronavirus variants.EUR/USD has retreated to 1.1300 area with the greenback preserving its strength ahead of the weekend. GBP/USD managed to close in the positive territory on Thursday but seems to be having a difficult time pulling away from 1.3300 early Friday. USD/JPY continues to edge higher above 113.00 on improving market sentiment but the pair's upside remains limited with US T-bond yields losing traction. USD/CAD is edging lower toward 1.2800 as crude oil prices stage a rebound following a sharp decline witnessed on OPEC+ decision to go ahead with their original plan to increase the oil output by 400,000 barrels per day in January.Gold slumped to its weakest level in a year at $1,761 on Thursday but recovered above $1,770 early Friday. The yellow metal continues to have a hard time finding demand when risk flows dominate the financial markets.Cryptocurrencies: Bitcoin is moving up and down in a narrow channel above $55,000. Ethereum closed the previous two trading days in the negative territory and seems to have gone into a consolidation phase around $4,500.

One-month risk reversal on Palladium (XPD/USD), a measure of the spread between call and put prices, not only drops for the second consecutive day but

One-month risk reversal on Palladium (XPD/USD), a measure of the spread between call and put prices, not only drops for the second consecutive day but marked the steepest fall in the number since early June, according to data source Reuters.  A call option gives the holder the right but not obligation to buy the underlying asset at a predetermined price on or before a specific date. A put option represents a right to sell. That said, the daily difference between them slumped to -1.004 for Thursday. The moves couldn’t be linked to the XPD/USD price performance as the precious metal rebounded from the monthly low the previous day, up 0.86% on a day around $1,780 heading into Friday’s European session. Even as the options market signal favors the palladium bears, the recent risk-on mood and multi-day low hints at the commodity’s extension of the corrective pullback.

EUR/GBP retreats towards intraday low surrounding 0.8493, up 0.03% around 0.8497 heading into Friday’s European session. The cross-currency pair dropp

EUR/GBP consolidates the biggest daily loss in two weeks.Weekly support break, sustained trading below nine-week-old resistance line hint at the further downside.200-SMA offers immediate support, upside momentum needs validation from November’s top.EUR/GBP retreats towards intraday low surrounding 0.8493, up 0.03% around 0.8497 heading into Friday’s European session. The cross-currency pair dropped the most in two weeks after breaking a one-week-long ascending trend line. The bearish impulse got favored by downbeat MACD signals and the quote’s moves below a descending resistance line from October 29. That said, 38.2% Fibonacci retracement (Fibo.) of the late September-November downturn, near 0.8487, offers immediate support to the pair ahead of the 200-SMA, around 0.8470 at the latest. In a case where the EUR/GBP sellers conquer the 0.8470 support, a seven-week-old horizontal area close to 0.8420 will be in focus before the last month’s bottom of 0.8380. Alternatively, a confluence of the previous support line and a medium-term resistance line, near 0.8530, becomes crucial for the pair buyers to watch for entries. Adding to the upside filters is the 61.8% Fibo. level of 0.8552 and November’s high of 0.8595, not to forget the 0.8600 threshold. To sum up, EUR/GBP bears keep controls until the quote prices remain below 0.8600. EUR/GBP: Four-hour chart Trend: Further weakness expected  

FX Strategists at UOB Group remain of the view that EUR/USD could advance past the 1.1400 barrier in the next weeks. Key Quotes 24-hour view: “EUR tra

FX Strategists at UOB Group remain of the view that EUR/USD could advance past the 1.1400 barrier in the next weeks. Key Quotes 24-hour view: “EUR traded between 1.1293 and 1.1347 yesterday, narrower than our expected sideway-trading range of 1.1290/1.1370. The underlying tone appears to have weakened somewhat and EUR is likely to drift to 1.1280. For today, a clear break of this level is unlikely and the strong support at 1.1240 is not expected to come under threat. On the upside, a breach of 1.1350 (minor resistance is at 1.1330) would indicate that the current mild downward pressure has eased.” Next 1-3 weeks: “Our view from Wednesday (01 Dec, spot at 1.1335) still stands. As highlighted, EUR is likely to trade with an upward bias towards 1.1410.  As upward momentum has not improved by much, a sustained rise above 1.1410 is unlikely. On the downside, a breach of 1.1240 (no change in ‘strong support’ level from yesterday) would indicate that EUR is not ready to head towards 1.1410.”

USD/CAD pares intraday gains with the latest declines to 1.2810 during early Friday morning in Asia. The Loonie pair’s weakness could be linked to the

USD/CAD retreats after poking 10-week top, grinds higher of late.Oil prices cheer softer yields, doubts over OPEC+ verdict.Risk appetite sours but yields fail to improve ahead of US NFP.ISM Services PMI, Canada jobs report for November are important too.USD/CAD pares intraday gains with the latest declines to 1.2810 during early Friday morning in Asia. The Loonie pair’s weakness could be linked to the run-up in the prices of Canada’s main export item WTI crude oil. However, cautious mood ahead of important data probes the traders of late. WTI crude oil prices rise 1.2%, around $67.55 by the press time, as oil traders seem to be of double minds after the global oil producers announced output hike following the previous plans. However, the OPEC+ verdict to consider production adjustments in January might have helped the black gold buyers. Adding strength to the commodity prices is the recent pullback in the US Dollar Index (DXY) and Treasury yields amid risk-off mood in the markets, coupled with indecision over the Fed’s next move. Also confusing USD/CAD traders are the mixed updates over the South African variant of the coronavirus, dubbed as Omicron. While the covid variant cases are on the spike in the West and China, adding more countries recently, expectations that the UK is near to finding a cure keep the market players hopeful. Elsewhere, US policymakers’ ability to avoid a government shutdown and the Sino-American jitters battle the hawkish Fedspeak and firmer US data. Against this backdrop, US 10-year Treasury yields reverse the previous day’s bounce off a 10-week low while stock futures improve after marking losses in early Asia. Looking forward, Canada’s Change In Employment and Unemployment Rate, expected 35K and 6.6% versus 31.2K and 6.7% previous readouts in that order, will join the US jobs report to entertain the USD/CAD traders. Among the US employment data, Nonfarm Payrolls, likely to rise from 531K prior to 550K, will be crucial to watch. Additionally, US ISM Services PMI for November, expected 65 against 66.7 prior, will also be important and so does oil price moves. Read: US Nonfarm Payrolls November Preview: Can we agree the labor market is healing? Technical analysis Although the 1.2840-50 area comprising multiple hurdles marked during last three-months challenge USD/CAD buyers, sustained break of previous resistance line from August, around 1.2770, precedes a three-week-long rising trend line near 1.2750 to challenge pair’s downside.  

Japanese Prime Minister Fumio Kishida said on Friday, he will submit new laws to boost supply chains and secure core infrastructure during the parliam

Japanese Prime Minister Fumio Kishida said on Friday, he will submit new laws to boost supply chains and secure core infrastructure during the parliamentary session next year.

Analysts at Goldman Sachs offer a sneak peek at what to expect from Friday’s US Nonfarm Payrolls data due for release at 1330 GMT. Key quotes “Looking

Analysts at Goldman Sachs offer a sneak peek at what to expect from Friday’s US Nonfarm Payrolls data due for release at 1330 GMT. Key quotes “Looking for a headline +575k and the unemployment rate to 4.5%.”  “Big Data employment indicators were mixed in the month, and we also see some chance that labor supply constraints weighed on pre-holiday hiring in the retail industry.” A drop in the jobless rate reflects “a strong household employment gain but a likely rebound in the labor force participation rate.”  Read: Nonfarm Payrolls Preview: Jobs’ headline could be a make it or break it in tapering’s decision

In an interview with the Financial Times (FT), Cleveland Fed President Loretta Mester made some hawkish comments on speeding up taper and likely rates

In an interview with the Financial Times (FT), Cleveland Fed President Loretta Mester made some hawkish comments on speeding up taper and likely rates in the next year. Key quotes Omicron threatens to stoke US inflation. Variant could exacerbate supply chain crunch and worker shortages. The fear of the virus is still one of the factors holding people back from re-entering the labor force. Have to entertain the risk that those persistently high numbers of inflation could become more embedded. The economy is better at dealing with these variants. The demand side effects have been lessened, but we’ve seen these supply-side effects, which are related to the virus. Would support at least one rate increase next year, and that two might be “appropriate”.

USD/INR stays indecisive around 75.00, even as weekly moves contrast the one-month rebound during early Friday. The Indian rupee (INR) is up for snapp

USD/INR bounces off intraday low inside a bullish chart pattern.Fortnight-old support line, 200-HMA joins firmer RSI to keep buyers hopeful.Multiple hurdles around 75.20 act as a tough nut to crack for bulls.USD/INR stays indecisive around 75.00, even as weekly moves contrast the one-month rebound during early Friday. The Indian rupee (INR) is up for snapping three-day advances but a bullish pennant on the hourly play favor buyers on a key day. That said, a firmer RSI line and the quote’s successful trading beyond a two-week-old support line and 200-HMA offer extra support to the pair bulls. Though, sustained trading beyond the 75.00 immediate hurdle will need validation from the multiple tops marked since October 20 near 75.19-20. Following that, the USD/INR rally towards the yearly top of 75.65 can’t be ruled out. On the contrary, a downside break of the stated pennant’s support line, around 74.90, will drag the quote towards the stated short-term support line near 74.83 and then to the 200-HMA level of 74.78. It should be noted, however, that the bearish impulse past 74.78 will aim for a 61.8% Fibonacci retracement level of November 18-30, near 74.45. To sum up, USD/INR bulls are bracing for another battle with the 75.20 resistance. USD/INR: Hourly chart Trend: Further upside expected  

Singapore Retail Sales (YoY) climbed from previous 6.6% to 7.5% in October

Singapore Retail Sales (MoM) fell from previous 6% to 0.7% in October

EUR/USD grinds lower around 1.1300, indecisive ahead of Friday’s European session. The major currency pair struggles for clear direction after two con

EUR/USD pauses two-day downtrend, remains sidelined on the key day.US Treasury yields remain pressured as markets brace for faster Fed tapering, extended PEPP at ECB.Virus woes escalate but with hopes of a cure, China, Russia portray geopolitical fears.ECB’s Lagarde, Eurozone Retail Sales and US ISM Services PMI are important too.EUR/USD grinds lower around 1.1300, indecisive ahead of Friday’s European session. The major currency pair struggles for clear direction after two consecutive days of a downside as traders await important catalysts scheduled for the day amid mixed macros and indecision over the major central bank’s next moves. Among the positives are hopes that the coronavirus variant from South Africa, dubbed as Omicron, will soon have its cure from the UK. On the same line were talks of the covid strain’s less lethal symptoms than initially feared. Furthermore, the US policymakers finally avoided the government shutdown, at least till February, while adding bars for the market’s preference for the US dollar. Alternatively, hawkish Fedspeak, led by including Federal Reserve (Fed) Bank of San Francisco President Mary Daly and Richmond President Thomas Barkin, fuelled US Treasury yields the previous day. Also helping the bond sellers were softer-than-expected prints of the US Initial and Continuing Jobless Claims for the week, as well as downbeat Challenger Job Cuts for November. It’s worth noting that the Eurozone Unemployment Rate eased in November and favored the European Central Bank (ECB) hawks. However, the regional central bank signaled less hawkish performance during December’s meeting, per the latest updates from Reuters. Additionally, the European Union (EU) and the US criticism of China’s moves in the South China Strait and Taiwanafter Thursday’s talks in Washington join Beijing’s calls for the US to cut the tariffs on their goods to weigh on the market sentiment. Amid these plays, the US 10-year Treasury yields fade bounce off 10-week low, marked the previous day, but the S&P 500 Futures also print 0.12% intraday downside by the press time. Furthermore, the US Dollar Index (DXY) rises 0.05%, up for the third consecutive day around 96.17 at the latest. Moving on, ECB’s President Christine Lagarde and Eurozone Retail Sales for November may entertain EUR/USD traders but major attention will be given to the US jobs report and ISM Services PMI for the last month. Technical analysis EUR/USD dropped for the last two days following its failures to cross the 100-SMA, around 1.1320 at the latest. Also favoring the sellers is the MACD line that flashed bear cross. However, a clear downside break of the one-week-long ascending support line, around 1.1255 at the latest, becomes necessary for the pair sellers to aim for the yearly low of 1.1186. Following that, 61.8% Fibonacci Expansion (FE) of November 09-30 moves, near 1.1120, will gain the market’s attention.  

Gold (XAU/USD) portrays a corrective pullback from a monthly low, bouncing off key supports to print a $1,773 level during early Friday. The yellow me

Gold bounces off four-month-old support line, key Fibonacci retracement level.Yields reverse corrective pullback from 10-week low, stock futures dwinde on mixed concerns.Omicron tightens the grip but UK braces for a cure, US policymakers avoid government shutdown.Gold Price Forecast: Pressure persists November low at risk of giving upGold (XAU/USD) portrays a corrective pullback from a monthly low, bouncing off key supports to print a $1,773 level during early Friday. The yellow metal’s recent gains could be linked to the market's cautious sentiment ahead of the all-important US Nonfarm Payrolls (NFP) release and softer yields. That said, the US 10-year Treasury yields fade bounce off 10-week low, marked the previous day, but the S&P 500 Futures also print 0.16% intraday downside by the press time. The reason could be linked to the market’s indecision amid contrasting headlines and a lack of conviction over the key central bank’s future moves, not to forger headlines concerning Omicron, China and the US. After days of haggling, the US policymakers finally avoided the government shutdown, at least till February. Though fears of the faster Fed tapering keep bond bears hopeful. Among the key promoters of faster rolling back of easy money, also conveying reflation fears, were Federal Reserve (Fed) Bank of San Francisco President Mary Daly and Richmond President Thomas Barkin. Elsewhere, cases of the South African coronavirus variant, dubbed as Omicron, rise in the US and China, as well as the UK. However, Britain approves medical treatment that’s likely a cure for the worries COVID-19 strain. On a different page, the European Union (EU) and the US criticized China after Thursday’s talks in Washington while Beijing calls for the US to cut the tariffs on their goods. Further, Beijing-based IT firm Didi is up for leaving the US stock exchange and joining Hong Kong’s Hang Seng. It’s worth noting that even if the global policymakers do signal to dial back the easy money policies, backed by the inflation fears, a fresh covid wave challenges the further monetary policy tightening. This in turn helps the investors to jump back towards the traditional safe-havens like US government bonds and gold. Though, today’s US employment data and PMI numbers will be important for near-term direction as the Fed policymakers slip into the no-talk periods from this Saturday. Read: US Nonfarm Payrolls November Preview: Can we agree the labor market is healing? Technical analysis Having been defeated by a wall of resistance around $1,792, comprising 50, 100 and 200-DMA, gold bounces off an ascending support line from August around $1,762, not to forget staying above 61.8% Fibonacci retracement (Fibo.) of March-June upside. Although softer yields and recovery from short-term key supports favor bulls to aim for another battle with the DMA convergence near $1,792, bearish MACD signals and an absence of oversold RSI keep the commodity sellers hopeful. That said, fresh selling awaits a clear downside break of the stated 61.8% Fibo. level of $1,768, which in turn will direct gold towards an ascending support line from August around $1,762. However, a nine-month-old horizontal area surrounding $1,750-47, will be a tough nut to crack for the gold sellers afterward. Meanwhile, gold buyers have a tough task on hand of crossing the $1,792 SMA convergence if they aim for re-entry. Following that, the $1,800 threshold and October’s peak near $1,813 will be on their radars before confronting another important resistance level close to $1,834 that includes highs marked during July and September. Overall, gold sellers have an upper hand, at least technically, than their bull friends. Though, US jobs report becomes crucial to watch. Gold: Daily chart Trend: Further weakness expected  

Asian equities stay mostly firmer amid softer US Treasury yields and hopes of finding a cure to the South African strain of the coronavirus, dubbed as

Asian shares grind higher as softer yields jostle with Omicron headlines.South African covid variant tightens grips in China, US but UK hints at a solution.China’s Didi prepares for US delisting, Hong Kong joining, US Senate avoids government shutdown.Japan shows readiness for more stimulus, Australian data came in mixed.Asian equities stay mostly firmer amid softer US Treasury yields and hopes of finding a cure to the South African strain of the coronavirus, dubbed as Omicron. However, chatters surrounding China and worsening COVID-19 conditions in the developed countries join the pre-Fed caution to challenges optimists. Amid these plays, MSCI’s index of Asia-Pacific shares outside Japan drops 0.63% whereas Japan’s Nikkei 225 rises 0.40% on firmer Jibun Bank Services PMI for November and Tokyo’s statement to not hesitate from suing more fiscal measures if needed. On the other hand, the European Union (EU) and the US criticized China after Thursday’s talks in Washington while Beijing calls for the US to cut the tariffs on their goods. Elsewhere, Omicron cases rise in the US and China while Beijing-based IT firm Didi is up for leaving the US stock exchange and joining Hong Kong’s Hang Seng. Against this backdrop, Shares in Hong Kong dropped a bit but those from China remain mildly bid at the last. Markets in Australia and New Zealand joined those from China but not Indonesia amid virus woes. It should be noted that South Korea’s KOSPI and India’s BSE Sensex print mild gains at the latest. On a broader front, the US 10-year Treasury yields fade bounce off 10-week low, marked the previous day, but the S&P 500 Futures also print 0.16% intraday downside by the press time. That said, Fed policymakers, including Federal Reserve (Fed) Bank of San Francisco President Mary Daly and Richmond President Thomas Barkin, were the most hawkish and fuelled US Treasury yields the previous day. Also helping the bond sellers were softer-than-expected prints of the US Initial and Continuing Jobless Claims for the week, as well as downbeat Challenger Job Cuts for November. Moving on, the US Nonfarm Payrolls (NFP) and ISM Services PMI for November will be crucial for the near-term market direction. Read: US Nonfarm Payrolls November Preview: Can we agree the labor market is healing?

AUD/USD is consolidating at yearly lows near 0.7070, heavily weighed down by the prevailing risk-on market profile. The market sentiment soured in Asi

AUD/USD drops in tandem with S&P 500 futures, as risk sentiment sours. Omicron covid woes escalate, China’s Caixin Services PMI disappoint. Focus shifts to US NFP, as the aussie shrugs off early RBA rate hike calls. AUD/USD is consolidating at yearly lows near 0.7070, heavily weighed down by the prevailing risk-on market profile. The market sentiment soured in Asia this Friday after investors reacted negatively to the news of the new Omicron covid variant spreading in the US, with new cases reported in Hawaii, New York and Los Angeles. Reflecting risk-off mood, the S&P 500 futures drop 0.20% so far. Further, renewed US-China tussle, as Didi Global Inc. prepares delisting from the US bourses, added to the damp mood while exacerbating the pain in the higher-yielding aussie. The aussie bears also cheered the drop in the Chinese Caixin Services PMI, with the index arriving at 52.1 in November vs. 53.8 previous. Collaborating with the downside in the spot, the US-Sino trade woes are back in play, especially after China’s ambassador to the US called for the abolition of tariffs on Chinese goods. Attention now turns towards the US Nonfarm Payrolls release, which could further strengthen the Fed’s hawkish view. Meanwhile, the aussie appears to ignore the earlier calls for an RBA rate hike, as investors remain unnerved. AUD/USD: Technical levels “The 4-hour chart also hints at further declines, as the pair remained below bearish moving averages, while technical indicators hold within negative levels with uneven strength. Support levels: 0.7060 0.7015 0.6970. Resistance levels: 0.7140 0.7175 0.7210,” FXStreet’s Chief Analyst Valeria Bednarik notes. AUD/USD: Additional levels to consider  

USD/CHF justifies Thursday’s bearish Doji while printing a 0.08% intraday loss around 0.9200 heading into Friday’s European session. Even so, the 200-

USD/CHF stays mildly offered following the previous day’s bearish candlestick formation.200-DMA challenges the sellers, key Fibonacci retracement levels add to the upside filters.Firmer Momentum line sustained trading beyond the key SMA, trend line favor buyers.USD/CHF justifies Thursday’s bearish Doji while printing a 0.08% intraday loss around 0.9200 heading into Friday’s European session. Even so, the 200-DMA challenges the Swiss currency (CHF) pair sellers. In addition to the stated key moving average near 0.9180, 50% and 61.8% Fibonacci retracement levels of August-November upside, respectively around 0.9197 and 0.9155, also challenge the sellers. It’s worth noting that the firmer Momentum line and a four-month-old ascending trend line, near 0.9115, keeps USD/CHF bulls hopeful. Meanwhile, an upside break of the 38.2% Fibonacci retracement level of 0.9240 will reject the bearish candlestick performance. However, USD/CHF buyers may wait for a clear run-up past 0.9250, comprising early November lows, to retake controls. Overall, USD/CHF remains sidelined with eyes on the US Nonfarm Payrolls (NFP). USD/CHF: Daily chart Trend: Further weakness expected  

In the face of the new Omicron covid variant and Fed Chair Jerome Powell’s hawkish view, the US dollar is poised for new upside risks in the coming we

In the face of the new Omicron covid variant and Fed Chair Jerome Powell’s hawkish view, the US dollar is poised for new upside risks in the coming weeks. Key quotes "Recent developments have introduced new upside risks to our broad Dollar forecasts.” “First, following public comments from Fed officials, our economists now expect the FOMC to accelerate the pace of QE tapering and to wrap up the process in mid-March. They also now anticipate three 25bp rate hikes next year instead of two (in June, September, and December, vs July and November previously), and a two-per-year pace thereafter.” “Second, the new covid variant already roiling South Africa may introduce new downside risks to global growth, and therefore upside risks to the safe haven Dollar.” “We have not revised our broad USD forecast today but will be considering an upgrade over the coming week."  

Japan government vows to deploy necessary fiscal spending without hesitation in response to the crisis, Reuters reports, citing the government's draft

Japan government vows to deploy necessary fiscal spending without hesitation in response to the crisis, Reuters reports, citing the government's draft guidelines for the fiscal 2022 budget.

Reuters is reporting that the US Senate has voted to approve the bill to avert a government shutdown over the weekend. The US government funding bill

Reuters is reporting that the US Senate has voted to approve the bill to avert a government shutdown over the weekend. The US government funding bill was passed in the Senate by 68-29 votes.   developing story ...

US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, snapped a six-day downtr

US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, snapped a six-day downtrend by the end of Thursday’s North American session, per the data source Reuters. In doing so, the inflation gauge bounced off the 10-week low flashed the previous day to print 2.47% at the latest. The uptick in the US inflation expectations could be linked to the hawkish Fedspeak and optimism over the US policymakers’ ability to avoid a government shutdown, which has a deadline of Saturday. Adding strength to the momentum were firmer US job-related data and recent optimism over Omicron treatment after the UK approves clinical trials for the drug that is a likely solution. However, spreading cases of the South African covid variant in the US and cautious mood ahead of the US Nonfarm Payrolls (NFP), as well as US ISM Services PMI, challenges the market optimism. Read: Yields retreat, S&P 500 Futures consolidate gains with eyes on US NFP

Market players stay divided during early Friday as the Fed hawks confront reflation and geopolitical concerns. Adding to the filters is the cautious m

US 10-year Treasury yields fade bounce off 10-week low.S&P 500 Futures pare the week’s heaviest daily gains, Asia-Pacific stocks trade mixed.Hawkish Fedspeak weigh on sentiment but hopes over Omicron treatment, US bill to avoid shutdown probe bond bears.China-linked headlines add to the negative catalysts but nothing more important than the US NFP.Market players stay divided during early Friday as the Fed hawks confront reflation and geopolitical concerns. Adding to the filters is the cautious mood ahead of the US Nonfarm Payrolls (NFP). To portray the sentiment, the US 10-year Treasury yields drop 2.3 basis points (bps) to 1.426% whereas the S&P 500 Futures drop 0.50% at the latest. That said, the US bond yields recovered from the latest October levels the previous day while the Wall Street benchmarks posted the biggest daily jump in the current week. Fed policymakers, including Federal Reserve (Fed) Bank of San Francisco President Mary Daly and Richmond President Thomas Barkin, were the most hawkish and fuelled US Treasury yields the previous day. Also helping the bond sellers were softer-than-expected prints of the US Initial and Continuing Jobless Claims for the week, as well as downbeat Challenger Job Cuts for November. The recent optimism over finding the cure of the South African variant of the coronavirus, dubbed as Omicron, seemed to have underpinned the US stocks on Thursday. Recently, the EU-US dislike for China and comments by Beijing’s Ambassador to the US, over phase one deal and tariffs, seem to challenge the risk appetite. Furthermore, the US policymakers’ struggle to avoid a government shutdown on Saturday probes the optimists of late. Talking about data, China’s Caixin Services PMI for November came in below 53.8 figures to 52.1 while the Composite PMI also dropped from 51.5 to 51.2 during the stated month. Before that, Australia’s PMIs were mixed for November while Japan’s Jibun Bank Manufacturing PMI came in better than previous for the stated month. Looking forward, markets expect 550K of NFP print and an easy 4.5% Unemployment Rate, an absence of which can extend the latest weakness of the US Treasury yields and favor equities amid hopes of further easing. Read: US Nonfarm Payrolls November Preview: Can we agree the labor market is healing?

Asia witnesses a turnaround in the market sentiment, as risk trades take a hit from the growing spread of the highly contagious Omicron covid variant

Asia witnesses a turnaround in the market sentiment, as risk trades take a hit from the growing spread of the highly contagious Omicron covid variant in the US. After a case of the new strain detected in California a day ago, Los Angeles reported its first case in the last hour. Earlier on, Hawaii confirmed a single Omicron covid strain cases while New York State registered five cases. Although all fives cases reported are said to be mild. In light of escalating concerns over the new variant, the US has announced a mandatory COVID-19 test a day prior to departure for travelers inbound to the country from December 6.

NZD/USD remains depressed around the intraday low of 0.6786 following the release of China’s Caixin PMI data during early Friday. In doing so, the kiw

NZD/USD braces for the biggest daily loss of the week, stays pressured around the yearly low.China Caixin Services PMI, Composite PMI ease in November.Risk appetite sours as US-China tussles regain market attention, Fedspeak favors faster tapering.US jobs report will be the key ahead of the Fed blackout period.NZD/USD remains depressed around the intraday low of 0.6786 following the release of China’s Caixin PMI data during early Friday. In doing so, the kiwi pair portrays the market’s sour sentiment, as well as reacts to the softer data, ahead of the key US Nonfarm Payrolls (NFP). China’s Caixin Services PMI for November came in below 53.8 figures to 52.1 while the Composite PMI also dropped from 51.5 to 51.2 during the stated month. In doing so, the private activity gauges differ from the official readings published earlier in the week. Read: Chinese Caixin Services PMIs expand at a slower pace Mostly adding to the bearish bias is the broad US dollar strength amid hopes of faster Federal Reserve (Fed) tapering after the policymakers sound hawkish in their latest appearances, before the silent period starts from this Saturday. Among the key promoters of faster rolling back of easy money, also conveying reflation fears, were Federal Reserve (Fed) Bank of San Francisco President Mary Daly and Richmond President Thomas Barkin. Not only the hawkish Fedspeak but the softer-than-expected prints of the US Initial and Continuing Jobless Claims for the week, as well as downbeat Challenger Job Cuts for November, also underpinned the hopes of faster Fed tapering and favored the yields and USD. It should be observed that the Wall Street benchmarks also consolidated weekly losses the previous day but the S&P 500 Futures and Asia-Pacific stocks dwindle during early Friday. The reason could be linked to the hopes of the US policymakers to avoid a government shutdown, which is looming for Saturday. Also positive for the kiwi prices could be the recent optimism over finding the cure of the South African variant of the coronavirus, dubbed as Omicron. Alternatively, the recent EU-US dislike for China and comments by Beijing’s Ambassador to the US, over phase one deal and tariffs, seem to challenge the risk appetite. On the same line were cautious sentiment ahead of the US jobs report. Read: US Nonfarm Payrolls November Preview: Can we agree the labor market is healing? Technical analysis In addition to a clear downside break of a 14-month-old rising support line around 0.6900, as sustained trading below 61.8% Fibonacci retracement (Fibo.) level of August 2020 to February 2021 upside, near 0.6860, also keeps NZD/USD bears hopeful. That said, the yearly low of around 0.6770 may act as immediate support to watch during the quote’s weakness. However, major attention will be given to a convergence of the descending support line from late August and 78.6% Fibo. level near 0.6710.  

Chinese ambassador to the US Qin Gang urges America for early abolition of additional tariffs on the country’s goods. Additional comments China is red

Chinese ambassador to the US Qin Gang urges America for early abolition of additional tariffs on the country’s goods. Additional comments China is reducing the time needed for approval of travel by US business executives to no more than 10 daysChina to make COVID-19 testing more convenient, will allow work during quarantine.    more to come ...

China Caixin Services PMI dipped from previous 53.8 to 52.1 in November

Activity in China's services sector expanded at a slower pace in November amid rising inflationary pressures and continuing small-scale COVID-19 outbr

Activity in China's services sector expanded at a slower pace in November amid rising inflationary pressures and continuing small-scale COVID-19 outbreaks, a private survey showed on Friday as reported by Reuters. ''The Caixin/Markit services Purchasing Managers' Index (PMI) fell to 52.1 in November from 53.8 in October, but remained above the 50-point mark that separates growth from contraction on a monthly basis.'' ''Caixin's November composite PMI, which includes both manufacturing and services activity, fell to 51.2 from 51.5 the previous month.'' Reuters reported that ''analysts say the services sector, which has been slower to recover from the pandemic than manufacturing, is more vulnerable to sporadic COVID-19 outbreaks and anti-virus measures, clouding the outlook for a much anticipated rebound in consumption in the months to come.'' "Policymakers should still focus on supporting small and midsize enterprises. They should also pay attention to problems including deteriorating job prospects, limited household income growth and weak consumer purchasing power," said Wang Zhe, senior economist at Caixin Insight Group. "Enterprises are still facing high cost pressures. Policymakers should take inflation seriously." AUD/USD remains steady regardless AUD/USD has been on the move to the downside in Asia, reestablishing the move that was interrupted by a bullish start on Wall Street on Thursday.  It had broken the hourly support ahead of the data as illustrated above. However, the data has failed to move the needle so far despite expanding at a slower clip in services.  About the China Caixin Services PMI A monthly questionnaire issued to purchasing executives in over 400 private service sector organizations yielded responses that formed the basis of the Caixin China General Services PMI (Purchasing Managers' Index). Sales, employment, inventories, and pricing are some of the variables tracked by the index. A rating of greater than 50 suggests that the services sector is generally increasing, while a reading of less than 50 indicates that it is generally contracting. A higher than expected figure should be seen as positive (bullish) for the CNY while a lower than expected figure should be seen as negative (bearish) for the CNY.

US Dollar Index (DXY) holds onto the three-day recovery moves, up 0.06% around 96.18 during early Friday. In doing so, the greenback gauge stays above

DXY prints three-day uptrend towards 10-DMA immediate resistance.Weekly falling trend line, 2021 peak also probes buyers before 61.8% FE level.20-DMA, five-week-old support line adds to the downside filters.Sustained trading above key supports, firmer RSI favor buyers.US Dollar Index (DXY) holds onto the three-day recovery moves, up 0.06% around 96.18 during early Friday. In doing so, the greenback gauge stays above the 20-DMA and an ascending support line from October 29 amid a firmer RSI line, not overbought, which in turn suggests the quote’s further advances. However, the 10-DMA level of 96.30 precedes a weekly resistance line near $96.45, to restrict the immediate upside of the DXY. Should the quote manage to cross the 96.45 hurdle on a daily closing basis, the latest run-up can challenge the yearly peak of 96.94 with eyes on the 61.8% Fibonacci Expansion (FE) of November’s moves, around 97.55. Meanwhile, pullback moves remain less worrisome until staying beyond 20-DMA and the aforementioned support line, respectively around 95.75 and 95.30. It’s worth noting that the US Dollar Index becomes vulnerable to visit 94.60 level, surrounding early November’s top, on the break of 95.30 support line. Read: Nonfarm Payrolls Preview: Jobs’ headline could be a make it or break it in tapering’s decision DXY: Daily chart Trend: Further upside expected  

In recent trade today, the People’s Bank of China (PBOC) set the yuan (CNY) at 6.3738 vs the estimate of 6.3739 and the previous 6.3719. About the fix

In recent trade today, the People’s Bank of China (PBOC) set the yuan (CNY) at 6.3738 vs the estimate of 6.3739 and the previous 6.3719. About the fix China maintains strict control of the yuan’s rate on the mainland. The onshore yuan (CNY) differs from the offshore one (CNH) in trading restrictions, this last one is not as tightly controlled. Each morning, the People’s Bank of China (PBOC) sets a so-called daily midpoint fix, based on the yuan’s previous day closing level and quotations taken from the inter-bank dealer.

As per the prior analysis, AUD/USD Price Analysis: High forex vol points to continuation to weekly support, the price remains on a bearish trajectory

AUD/USD bears seeking a downside extension with critical data coming up. Chinese data and the US Nonfarm Payrolls will be key events for the pair on Friday. As per the prior analysis, AUD/USD Price Analysis: High forex vol points to continuation to weekly support, the price remains on a bearish trajectory as follows: In the daily chart above, the weekly lows are illustrated with 0.6990 eyed as a potential target on a break of 0.7030. For the day ahead, the bears need to break the hourly support as follows: AUD/USD H1 chart The bears are taking control below the 0.7120 key level with the price staying below the 21-EMA: Bears will want to see a break of the 0.7080 support before fully engaging, but the Chinese data could be the catalyst. With that being said, there are prospects of a trapped market into the NFP data today if the price fails to break lower on disappointing Chinese data. 

USD/JPY reverses the day-start losses to regain 113.15, following the first positive day in three, during the early hours of Tokyo open on Friday. The

USD/JPY picks up bids after snapping two-day downtrend.Market sentiment dwindles amid Fed rate hike bets, Omicron concerns and US funding bill news.Hawkish Fedspeak couldn’t stop Wall Street from positing gains but Asia-Pacific equities trade mixed of late.Japan Jibun Bank Services PMI improved in November, US jobs report in focus.USD/JPY reverses the day-start losses to regain 113.15, following the first positive day in three, during the early hours of Tokyo open on Friday. The risk barometer pair tracked from the firmer US Treasury yields the previous day to recover while hopes of finding a solution to the South African covid variant, as well as avoiding the US government shutdown seem to recently favor the buyers. However, cautious sentiment ahead of the US Nonfarm Payrolls (NFP) data for November, expected 550K, tests the USD/JPY upside. US 10-year Treasury Treasury yields bounced off a 10-week low to regain 1.45% level the previous day, down two basis points (bps) to retest the 1.43% mark at the latest. Fedspeak pushed for a sooner tapering in the last-ditched efforts before the silent period starting from this Saturday, which in turn propelled the bond yields and the US Dollar Index (DXY). Among the key promoters of faster rolling back of easy money, also conveying reflation fears, were Federal Reserve (Fed) Bank of San Francisco President Mary Daly and Richmond President Thomas Barkin. Also adding to the DXY strength could be softer-than-expected prints of the US Initial and Continuing Jobless Claims for the week, as well as downbeat Challenger Job Cuts for November. That said, the final reading of Japan’s Jibun Bank Services PMI for November rose past 50.7 prior to 53.00. Furthermore, optimism concerning Omicron’s cure, spread by the UK, joins the recovery in the US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, to favor the USD/JPY prices. On the contrary, fears of a negative surprise from the US jobs report and virus woes join geopolitical tension surrounding Russia, Iran and China to test the market sentiment and the USD/JPY prices. Amid these plays, the US 10-year Treasury yields struggle to extend the previous day’s rebound while the Asia-Pacific equities and the S&P 500 Futures trade mixed by the press time. Moving on, the virus updates and the geopolitical chatters could offer intermediate direction to the USD/JPY traders ahead of the US NFP. Read: US Nonfarm Payrolls November Preview: Can we agree the labor market is healing? Technical analysis USD/JPY holds onto the previous resistance line from March, around 112.75 by the press time. However, the 50-DMA level of 113.40 restricts immediate upside.  

Ireland Purchasing Manager Index Services dipped from previous 63.4 to 59.3 in November

Hong Kong SAR Nikkei Manufacturing PMI above forecasts (51.3) in November: Actual (52.6)

WTI crude oil prices struggle to keep the previous day's recovery moves from late August around $67.00 during Friday’s Asian session. The black gold’s

WTI fades bounce off 15-week low, grinds higher during the second positive day in four.Oversold RSI conditions favor rebound, 61.8% Fibonacci retracement guards immediate upside.Bears await a clear break of ascending support line from March.WTI crude oil prices struggle to keep the previous day's recovery moves from late August around $67.00 during Friday’s Asian session. The black gold’s stated rebound portrays the importance of an upward sloping trend line from March 23 with the oversold RSI conditions suggesting further recovery. However, 61.8% Fibonacci retracement level of March-October upside, around $68.00, probes the oil buyers before directing them to the key 200-DMA hurdle of $69.85. Also acting as an upside filter is the $70.00 threshold and 50% Fibo. near $71.20. Alternatively, a daily closing below the multiday-old support line near $64.75 will redirect the WTI bears to attack August month’s low of $61.73. Following that, the $60.00 round figure may probe the commodity sellers before directing them to March’s low of $57.27. WTI: Daily chart Trend: Further recovery expected  

USD/CAD is on the move and the bulls are in control from a longer-term perspective. The following illustrates the prospects of a run all the way into

USD/CAD is making tracks to the upside with the 1.30s are in sight. The month and weekly targets are clear and Fridays Nonfarm payrolls could be the deciding factor. USD/CAD is on the move and the bulls are in control from a longer-term perspective. The following illustrates the prospects of a run all the way into test the 1,30's in the coming days. However, US Nonfarm Payrolls will be critical in this regard.  The greenback earlier gained after US data showing initial claims for state unemployment benefits rose 28,000 to a seasonally adjusted 222,000 for the week ended Nov. 27, lower than the forecast of 240,000. Today, Payrolls probably surged again, according to analysts at TD Securities.   ''A strong trend continues to be signaled by surveys and claims, but our forecast also reflects the latest Homebase data—with a decline in the Homebase series more than accounted for by seasonality. Along with our +650k forecast for payrolls, we forecast a 0.2pt decline in the unemployment rate and a 0.4%m/m (5.0% y/y) rise in hourly earnings.'' USD/CAD monthly chart The bulls are in charge and there is overhead resistance that could be tested in the coming days near 1.2995.  USD/CAD weekly chart The weekly outlook has the price on the verge of making a W-formation. There needs to be some more upside, however. The bulls can target the key monthly resistance at 1.3050 once 1.30 is cleared. On the flip side, the W-formation would be expected to attract bears in to test the neck line near 1.2770. 

Japan Jibun Bank Services PMI up to 53 in November from previous 50.7

Reuters came out with its optimistic survey results for the market expectations of the Reserve Bank of Australia’s (RBA) next move. “Against a backdro

Reuters came out with its optimistic survey results for the market expectations of the Reserve Bank of Australia’s (RBA) next move. “Against a backdrop of rising inflation in Australia and around the world, the RBA is now predicted to lift its cash rate from a record low 0.10% in the first quarter of 2023,” per November 29-December 2 poll of 35 respondents were published during Friday’s Asian session. “That's sooner than the second quarter of 2023 forecast in a poll taken almost a month ago, while in a survey taken only two months ago there was no consensus for any rate rise in 2023,” adds Reuters. Key quotes A small majority, 16 of 25 economists, expected at least one rate hike by the end of the first quarter of 2023, compared with 11 of 25 economists in the previous poll. Economists in the Nov. 29-Dec. 2 poll expect a second rate hike in the second quarter of 2023 of 25 basis points to 0.50%. The cash rate is then projected to rise to 0.75% in the final quarter of 2023. All 34 economists expected the cash rate to stay at 0.10% at the Dec. 7 meeting. Market reaction Despite the upbeat Reuters poll on RBA rate hike calls, the AUD/USD refreshes intraday low to 0.7085 as markets brace for the Fed rate hike and awaits Friday’s US jobs report. Read: AUD/USD bears look to 0.7000 on firmer yields ahead of US NFP

Silver (XAG/USD) remains pressured, paring the previous day’s corrective pullback from a multiday low during Friday’s Asian session. In doing so, the

Silver fades bounce off two-month low, stays below fortnight-old resistance line.Oversold RSI probes sellers but bulls need to cross 200-SMA for conviction.Silver (XAG/USD) remains pressured, paring the previous day’s corrective pullback from a multiday low during Friday’s Asian session. In doing so, the bright metal seesaws around 78.6% Fibonacci retracement level of an upside from late September to mid-November. Adding to the bearish bias is the descending trend line from November 22. However, oversold RSI conditions challenge the XAG/USD sellers, which in turn question the bears and raises hopes of a bounce towards the short-term resistance line, near $22.65 at the latest. Should silver buyers conquer the $22.65 hurdle, the $23.00 threshold and 50% Fibo. near $23.40 can test the upside before driving the prices towards the 200-SMA level of $24.06. On the flip side, a clear downside break of the stated 78.6% Fibonacci retracement level of $22.20 may respect the $22.00 round figure as an intermediate halt during the fall to the yearly bottom of $21.42. Overall, silver prices are likely to remain bearish until crossing the 200-SMA hurdle but corrective pullbacks can’t be ruled out. Silver: Four-hour chart Trend: Further weakness expected  

Having snapped a three-day downtrend, GBP/USD wobbles around 1.3300 during the initial Asian session trading on the key Friday comprising the US jobs

GBP/USD holds onto the previous day’s rebound within a choppy range.EU-UK Brexit deal remains less likely in 2021, London-Washington jostle over post-Brexit trade terms.UK raises hopes to curb Omicron spread as daily infections jump over 50,000.Final reading of UK Services PMI may offer intermediate moves but nothing more important than US NFP.Having snapped a three-day downtrend, GBP/USD wobbles around 1.3300 during the initial Asian session trading on the key Friday comprising the US jobs report for November. The cable pair’s improvement could be linked to the market chatters that the UK steps forward to finding the cure to the South African covid variant. However, firmer US dollar ahead of the US Nonfarm Payrolls (NFP) joins Brexit woes to weigh on the quote. In a landmark achievement for the British scientists, the UK Medicines and Healthcare products Regulatory Agency (MHRA) approved an antibody treatment that it expects to overcome the coronavirus variant such as Omicron. Sotrovimab is a single monoclonal antibody drug joined developed by GSK and Vir Biotechnology that gets the UK MHRA approval. On the other hand, Irish Foreign Minister Simon Coveney crossed wires while signaling no Brexit deal between the European Union (EU) and the UK over the Northern Ireland (NI) protocol during 2021. However, Northern Ireland Secretary Brandon Lewis said he is optimistic to reach a deal but also cited the odds of triggering Article 16. While the EU-UK Brexit deal is in limbo, the US-UK post-Brexit trade talks are also fragile as both the nations recently jostled over Washington’s failure to remove tariffs on UK steel and aluminum. It’s worth noting that the final reading of the UK Manufacturing PMI for November came in softer than initial estimates, adding to the expectations that the Bank of England (BOE) will refrain from a rate hike during the December meeting. Even so, market chatters are on the spike that the “Old Lady” will supersede the Fed to announce the rate hikes. Talking about the US, the benchmark US 10-year Treasury yields bounced off a 10-week low to regain 1.45% level, up five basis points (bps), on Thursday as Fedspeak pushed for sooner tapering in the last-ditched efforts before the silent-period starting from this Saturday. Among the key promoters of faster rolling back of easy money, also conveying reflation fears, were Federal Reserve (Fed) Bank of San Francisco President Mary Daly and Richmond President Thomas Barkin. It should be observed that softer-than-expected prints of the US Initial and Continuing Jobless Claims for the week, as well as downbeat Challenger Job Cuts for November, add to the Fed rate hike concerns and favored the GBP/USD bears. However, it all depends upon the US jobs report for November as the Fed policymakers brace for the crucial decision. Technical analysis A downward sloping trend line from late October, around 1.3325, guards the immediate upside of the GBP/USD prices ahead of early November’s low near 1.3355. Alternatively, the yearly bottom of 1.3194 stays on the bear’s radar.  

EUR/USD bears remain hopeful around 1.1300, grinding lower during early Friday morning in Asia. The major currency pair dropped for the last two days

EUR/USD holds lower ground after two consecutive days of downtrend.Sustained trading below 100-SMA, bearish MACD favor sellers.Weekly support becomes the key for bear’s entry targeting 61.8% FE.1.1385, five-week-old descending trend line add to the upside filters.EUR/USD bears remain hopeful around 1.1300, grinding lower during early Friday morning in Asia. The major currency pair dropped for the last two days following its failures to cross the 100-SMA. Also favoring the sellers is the MACD line that flashed bear cross. However, a clear downside break of the one-week-long ascending support line, around 1.1255 at the latest, becomes necessary for the pair sellers to aim for the yearly low of 1.1186. Following that, 61.8% Fibonacci Expansion (FE) of November 09-30 moves, near 1.1120, will gain the market’s attention. Alternatively, a 100-SMA level of 1.1320 will guard the immediate recovery moves ahead of a horizontal area comprising multiple tops marked since mid-November, near 1.1375-85. Adding to the resistance is a downward sloping trend line from late October, close to 1.1430 by the press time. Should the quote manage to rally past 1.1430, the 1.1465 level may act as an intermediate halt during the rally targeting the early November’s low near 1.1515. EUR/USD: Four-hour chart Trend: Further weakness expected  

Gold (XAU/EUR) vs. the euro advances as the Asian session begins, up some 0.05%, trading at €1,565 at the time of writing. Investors’ worries about th

On Thursday, XAU/EUR pare Wednesday gains, down some 1.49%.WHO’s official said that some of the early indications regarding the Omicron variant are that most cases are mild.XAU/EUR: The upward bias is still in play, though a daily close above €1,590 is needed to extend gold gains. Gold (XAU/EUR) vs. the euro advances as the Asian session begins, up some 0.05%, trading at €1,565 at the time of writing. Investors’ worries about the Omicron coronavirus strain seem to ease, as a World Health Organization (WHO) official said that some of the early indications are that most cases are mild. Either way, financial markets would likely remain volatile unless investors get more clarity on the new COVID-19 variant. In the overnight session, XAU/EUR seesawed around the €1,560-€1,580 range, remaining at those levels until the New York open. Since then, the gold vs. the euro slid towards €1,555, though staged a recovery of 15, to settle down at current levels. On Thursday, the macroeconomic docket of the Eurozone featured the so-called “prices at the gate,” with the Producer Price Index for October on a monthly and yearly basis.  Both readings were higher than expected, with the monthly figure rising 5.4%, more than the 3.5% foreseen. The annual figure rose by 21.9%, higher than the 19% estimated. In the meantime, the German 10-year Bund yield is falling four basis points, sitting at -0.375%, boosting the yellow metal prospects against the single currency. XAU/EUR Price Forecast: Technical outlookThe XAU/EUR daily chart shows that the single currency trimmed some losses against the non-yielding metal, but the bias remains tilted to the upside. Why? Because the daily moving averages (DMA’s) with an upslope reside well below the spot price, signaling that XAU bulls are in charge. In fact, Thursday’s low coincides with the 50-DMA level at €1,557, which would be the first support, if the EUR appreciates In the outcome of extending Wednesday’s gains, the first resistance would be the November 30 high at €1,590. Breach of the latter could pave the way for further gains. The following resistance would be the €1,600 psychological level, followed by the November 18 cycle low previous support-turned-resistance at €1,633. On the flip side, the first support would be the 50-DMA at €1,557. The break of the previous-mentioned would expose essential support areas, like the 100-DMA at €1,539, followed by the confluence of 200-DMA and the November 3 low, between the €1,516-20 range.

On Thursday, US Deputy Secretary of State Wendy Sherman and the Secretary-General of the European External Action Service, Stefano Sannino, held talks

On Thursday, US Deputy Secretary of State Wendy Sherman and the Secretary-General of the European External Action Service, Stefano Sannino, held talks in Washington. They released a joint statement raising strong concerns over China’s "problematic and unilateral actions" in the South and East China Seas and the Taiwan Strait, per Reuters. Key quotes The two sides discussed rights abuses in China, including repression of religious minorities in Xinjiang and Tibet and the erosion of autonomy in Hong Kong.  They expressed strong concern over China’s problematic and unilateral actions in the South and East China Seas and the Taiwan Strait that undermine peace and security in the region and have a direct impact on the security and prosperity of both the United States and European Union. Sherman and Sannino are due to continue their China-related discussions with high-level consultations on the Indo-Pacific on Friday. FX reaction The news should have weighed down the AUD/USD prices, considering Australia’s trade proximity to China, but the pre-NFP trading lull keeps the quote mostly unchanged around 0.7100 of late. Read: AUD/USD bears look to 0.7000 on firmer yields ahead of US NFP

AUD/USD traders flirt with the 0.7100 threshold after seven consecutive days of a south-run. That said, the risk barometer struggled for a clear direc

AUD/USD remains depressed after seven-day south-run around yearly low.Fed hawks fuelled yields, equities consolidate losses amid mixed concerns over Omicron.Aussie, China PMIs can offer intermediate moves during pre-NFP trading lull.AUD/USD traders flirt with the 0.7100 threshold after seven consecutive days of a south-run. That said, the risk barometer struggled for a clear direction the previous day despite posting mild losses on firmer Treasury yields. Though, equity bulls stopped the quote’s weakness as Aussie traders brace for the key Friday comprising the US Nonfarm Payrolls (NFP) data. The benchmark US 10-year Treasury yields bounced off a 10-week low to regain 1.45% level, up five basis points (bps), on Thursday as Fedspeak pushed for sooner tapering in the last-ditched efforts before the silent-period starting from this Saturday. Among the key promoters of faster rolling back of easy money, also conveying reflation fears, were Federal Reserve (Fed) Bank of San Francisco President Mary Daly and Richmond President Thomas Barkin. It’s worth noting that softer-than-expected prints of the US Initial and Continuing Jobless Claims for the week, as well as downbeat Challenger Job Cuts for November, also underpinned the hopes of faster Fed tapering and favored the yields. The firmer bond coupons in turn propelled the US Dollar Index (DXY) to print a second consecutive day of gains but couldn’t stop equities from consolidating the previous two days’ losses. At home, Australia Trade Balance and housing numbers came in stronger but the Imports and PMI details were mixed for October and November respectively. That said, the Pacific major is alert enough to tame the virus outbreak, with various state boundaries and checks announced of late. Also important for the AUD/USD traders to know is the fact that multiple Chinese developers were bracing for the bond issue, suggesting relief for the cash-crunch market. Adding to the positives was the news that China will prolong the period of tax exemption for foreign bond investors. Furthermore, chatters that the UK announced SOTOVIMAB, an injectable drug, to be effective against Omicron joins the US policymakers’ rush to avoid government shutdown to ease the market fears and favor the risk-barometer pair. That said, AUD/USD traders may react to China’s Caixin Services PMI but major attention will be given to the virus updates. Above all, the US jobs report for November will be a make-or-break case to follow. Read: Nonfarm Payrolls Preview: Jobs’ headline could be a make it or break it in tapering’s decision Technical analysis Having offered a clear downside break of yearly support, AUD/USD is well-set for 0.7000-0.6990 support zone comprising lows marked during September and November 2020. The 0.7050 levels may offer an intermediate halt during the fall. Should the bulls return, the previous support line near 0.7145 and the monthly descending trend line surrounding 0.7175 will challenge the corrective pullback.  

After multiple days of jostling, the US policymakers managed to avoid the government shutdown as the House of Representatives passed a bill to extend

After multiple days of jostling, the US policymakers managed to avoid the government shutdown as the House of Representatives passed a bill to extend the government funding through February. More to come

Early Friday morning in Asia, global rating giant Fitch crossed wires while conveying the news to downgrade Turkish long-term Issuer Default Ratings (

Early Friday morning in Asia, global rating giant Fitch crossed wires while conveying the news to downgrade Turkish long-term Issuer Default Ratings (IDRs) to negative from stable. The rating giant kept the status of BB- for Turkey’s IDR unchanged. More to come.

Australia Commonwealth Bank Services PMI registered at 55.7 above expectations (55) in November

Australia Commonwealth Bank Composite PMI rose from previous 55 to 55.7 in November

As the New York session ends, the EUR/JPY advance some 0.24%, trading at 127.88 at the time of writing. The market sentiment is upbeat at press time,

The shared currency trims some of Wednesday’s losses, up some %.The market sentiment is upbeat, boosting the prospects of riskier assets to the detriment of the JPY and the CHF.EUR/JPY: Trading range-bound, though slightly tilted to the downside. As the New York session ends, the EUR/JPY advance some 0.24%, trading at 127.88 at the time of writing. The market sentiment is upbeat at press time, following a risk-off European session, with all of its indices in the red. In the US, equity indices finished the session with gains, rising between 0.52% and 1.66%. Market participants reassess the impact of the new COVID-19 Omicron variant. Although it has been reported to be more transmissible, it appears to cause mild symptoms. Apart from that,  the US central bank looking to finish the bond taper in the Q1 of 2022 dented the prospects of safe-haven assets like the Japanese yen, with US equities rallying and US bond yields following their footsteps.EUR/JPY Price Forecast: Technical outlookIn the 1-hour chart, the EUR/JPY pair is trading sideways. In the overnight session, EUR/JPY bulls pushed the pair towards the confluence of the 50 and the 100-hour simple moving averages, around 128.20, failing to break above it. That left the pair, at the mercy fof JPY bulls, which sent the pair tumbling towards 127.70. It is worth noting that the pair has a downward bias in the near term, as the 1-hour moving averages (MA’s) reside above the spot price. If the EUR/JPY keeps falling further, the first support would be the December 1 high 127.56.  A breach of the latter would expose the 127.00 figure, followed by February 9 swing low at 126.43. On The flip side, the first resistance would be 128.00. A break above that level would expose the November 30 high at 128.60, followed by the 200-hour SMA at 128.62.  
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