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  • Writer's pictureMike Paterson

US jobs data causes concern.

Wednesday 6 December 2023

Markets still making their mind up after the recent corrections but yesterday's US JOLTS data saw a much weaker jobs creation number than expected and added to general concerns. Markets are still firmly focussed on Central Bank rate cuts in 2024 as inflation eases but we've seen some further correction of the recent focus on USD amid a wider appreciation of all major CBs as I've warned here recently but all remains in the balance. Moodys have downgraded Chinese growth expectations and this morning in Asia we've seen some intervention to support the Yuan.

Bank of Cananda next CB off the rank today with a hold expected albeit still cautious on inflation. US Fed next on the 13th, BOE, ECB and SNB 14th then BOJ wrapping things up on the 19th. The ongoing Middle East back-story sadly continues meanwhile and casts its own shadow over markets but still not driving prices. Soggy German factory orders data this morning not helping the Euro. US NFPs lurking on Friday. BOE Financial Stability Report out today.

Equities had an up n down day in NY then rallied in Asia but lower in early European trading as I type with the jury still out. WTI capped at $74.25 this time but holding $72.15-20 as the retreat resumed and still looking soggy. Gold capped at $2040 this time after those heady highs of $2148 and we've since seen a further retracement to look at $2010. Heady times still for gold traders but some froth taken out this week.

GBPUSD: Holding 1.2575 in yesterday's retreat below 1.2600 after capping between the pivotal 1.2650-60 area again post-JOLTS data. I remain poised for further rally sells when momentum fades but caution still required for the moment as we range tightly. EURGBP: Support at 0.8550-60 still but capping into 0.8580 this time. Jury still out but CB rate divergence in play for the moment and hence pressure on the Euro. GBPJPY: Capping at 186.00 then 185.80 this time amid the variable risk tones but holding 185.20 amid some core pair support still. Sellers remain poised.

EURUSD: Support now around 1.0775 for the moment after capping at 1.0830 and retreating on the general EUR supply still but option contracts in play again helping to support. I remain a rally seller overall still. USDJPY: Capping at 147.40 this time amid the softer risk JPY demand again after holding 146.50 in yesterday's retreat post-JOLTS. I remain a rally seller as preferred side overall at these still elevated levels.

For more detailed analysis across a variety of pairs email

Interbank rates: 07.10 GMT

GBPUSD 1.2597

EURUSD 1.0787

EURGBP 0.8561

GBPEUR 1.1678

USDJPY 147.06

GBPJPY 185.25

GBPCAD 1.7080

GBPCHF 1.1022

GBPZAR 23.8175

GBPHKD 9.8154

USDCHF 0.8747

EURCHF 0.9436

EURHKD 8.4050

AUDUSD 0.6588

NZDUSD 0.6167

USDCAD 1.3569

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