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  • richard evans

USD 'jolted' by jobs data

Good morning

A much lower than expected JOLTS jobs number yesterday was the catalyst for USD weakness which saw GBPUSD move up from 1.2565 to reach 1.2655 by the close, and EURUSD from 1.0785 to 1.0890. Both pairs are a touch lower now at 1.2640 and 1.0865 but the market was certainly paying more attention to this release than we have seen for a long while, coming as it does ahead of the nonfarm payrolls Friday.

JOLTS is one of the favourite indicators for the Fed, and pricing for further rates rises has fallen since the release, while equities pushed higher. Todays ADP employment number is considered to be loosely correlated to nonfarms, so there will be a lot of attention here this afternoon, possibly even more than the GDP release which follows it.

Followers of Bitcoin will have noticed a decent push higher yesterday from $26,000 to $28,000. This followed the post-JOLTS weaker US Dollar move, but the main reason for the BTC strength was the overturning in the US court of appeals of the ban on an ETF based on Bitcoin prices. This does create the potential for funds to flow into Bitcoin, boosting demand and supporting prices. Quite why one invests in Bitcoin other than the hope of making a few quick bucks is still beyond me, although I do readily accept I am perhaps not young enough nor involved in enough crime to really appreciate the benefits it brings.

Aussie monthly CPI came in lower than expected at 4.9% which initially sent AUD lower, AUDUSD retreating 20 pips or so and GBPAUD pushing up from 1.9530 to 1.9590, although the AUD weakness was short-lived. I have seen a couple of buy AUD trade ideas this morning, UBS are looking to buy AUDUSD on dips to 0.6450, we are actually pretty much at that level now so time for them to get involved. A target for them is around 0.6600.

Regular readers may remember that almost one year ago I had been quite taken with a story involving two leading chess players. One, Carlsen, had accused another player, Niemann, of cheating. Carlsen offered no particular evidence although did suggest that Niemann may have cheated in around 100 online matches. When Niemann beat Carlsen last September, Carlsen was sure something was amiss, even something like ear or skin implants which could send signals to Niemann. Anyway it would appear that the two have settled their dispute and Carlsen has said there was no cheating. Whether or not he believes this is another matter.

Running a bit late so I’ll leave it there. EU confidence numbers and german inflation come before the US ADP and GDP releases. As I said above it could actually be the ADP number that is of most interest today.

- 10.00 EU consumer confidence

- 13.00 German HICP

- 13.15 US ADP employment

- 13.30 US GDP, PCE, pending home sales

- 00.50 Japan retail trade

- 02.00 China manufacturing, non-manufacturing PMI

- 02.30 AUS private Capex

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