US 10-y Yield Should Find Support in December Correction Low (3.78%)

The US 10-y yield in such a case should find support in the December correction low (3.78%) though. Barring a huge miss, first resistance around EUR/USD 1.0945/1.096 is probably safe.

GBP/USD: Poised for Potential Bullish Breakout Ex-post BoE

Through the lens of technical analysis, positive elements have surfaced in the price actions of GBP/USD. It has consolidated in a “Symmetrical Triangle” range configuration in place since 28 December 2023; a consolidation or “resting moment” to retrace the impulsive upmove sequence of its recent medium-term uptrend phase from 4 October 2023 low of 1.2037 to 28 December 2023 high of 1.2828.

Canadian Dollar Eyes US Nonfarm Payrolls

The Canadian dollar is drifting but things could get busier in the North American session as the US releases the nonfarm payrolls report. In the European session, USD/CAD is trading at 1.3371, down 0.11%.

Aussie Slides After Hot US Nonfarm Payrolls

The Australian dollar has fallen almost 1% after the US nonfarm payrolls and has given up today’s earlier gains. In the North American session, AUD/USD is trading at 0.6644, down 0.40%.

US: January Delivers a Scorching Hot Employment Report   

Strong employment readings for the month of January have become a recurring theme post-pandemic. Not only did job growth handily beat expectations, but job gains were also reasonably widespread as evidenced by the private-sector diffusion index rising sharply to 65.6 – the highest level since January 2022. Monthly wage growth also accelerated by the fastest pace in nearly two years, pushing the year-on-year measure up to a five-month high.

Weekly Focus

In a week with no big data or central bank surprises, renewed fears of turmoil in the US banking sector on the back of the free fall of the New York Community Bancorp (NYCB) stock, drove longer dated yields lower as markets largely ignored hawkish Fed comments. With decent macro data and declining inflation as a solid backbone, equity markets did not suffer any big blows on the back of the NYCB situation.

Will Weak Jobs Data Prompt RBNZ to Drop Hiking Bias

At its November gathering, the RBNZ held its official cash rate (OCR) steady at 5.5% and noted that inflation remains too high and that if price pressures were to become stronger than anticipated, interest rates would likely need to rise further. Officials also lifted their OCR projections to signal a decent chance for another 25bps hike before this tightening crusade ends.

Week Ahead – RBA Decision and US Data on the Menu

Dollar cannot sustain Fed-fueled advance, will ISM data help? Reserve Bank of Australia could abandon its tightening bias Crucial data releases also from China, Canada, and New Zealand

Groundhog Day: Hiring Once Again Starts the Year at Blistering Pace

Hiring once again came out of the gate strong in 2023. Nonfarm payrolls rose by 353K in January, blowing past consensus expectations for a 185K gain. What's more, revisions point to stronger momentum in hiring through the end of last year; payrolls in the fourth quarter of 2023 are now reported to have grown an average of 203K compared to 165K prior to today's report.

Canada's January Unemployment Rate to Hit 5.9%—Highest Since Pandemic

Canadian jobs numbers for January will be centre stage next Friday as policymakers and market watchers look for signs of deterioration in the labour market. The data for the first month of 2024 will tell a similar story to the one we have observed over 2023—employment is rising but not quickly enough to prevent an increase in the unemployment rate.