Dollar/CAD is tormenting the fund shorts this morning with a possible break above the 1.3180-90s as US yields resume their everything is fine rally, but it looks like some positioning adjustment ahead of the Canadian employment report at 8:30amET is seeing the market pull back a tad now. The expectations for this mornings numbers are +15.9k jobs created in October, wage growth of +4.2% YoY, and an unemployment rate of 5.5%. A weak report will likely see USDCAD shoot higher to the 1.3220-30s at least.
DEC CRUDE OIL DAILY
Euro/dollar continues to fall today as US/China trade deal optimism reaches a fever pitch. Forget yesterdays Reuters headline about the White House plan to rollback China tariffs faces fierce internal opposition which saw risk assets take a dip late in the session. The White House is now very, very optimistic about reaching a trade deal with China soon. Seehere. US 10yr yields are attacking the 1.95% handle once again and December gold futures have taken out yesterdays NY lows in the 1460s. All this is weighing on EURUSD as NY trade gets underway. We think the market could slip further to the 1.0990-1.1000 level should it not regain the 1.1030s quickly. The US reports its preliminary November University of Michigan sentiment survey at 10amET this morning and the expectation is for 95.9.
DEC GOLD DAILY
Sterling continues to struggle today as the weight of yesterdays dovish Bank of England meeting remains on trader minds. Were also seeing broad demand for USD this morning, which continues to be driven by the rout in global bond markets. Chart support in the 1.2790-1.2800 continues to hold for now, but if it doesnt we think theres a risk for a sizable drop for GBPUSD to the low 1.27s.
The Australian dollar is got knocked back below the pivotal 0.6895 in Asian trade last night after the RBA released its quarterly Statement on Monetary Policy. Full reporthere. In our opinion, it reads a bit more dovishly than the RBAs monetary policy statement from earlier this week, especially with the prepared to ease further language. With that, AUDUSD has since been attacking Wednesdays chart support levels in the 0.6870s and the 0.6860s. With the broad demand for USD now underway though because of rising US yields, we think the selling could intensify.
Dollar/yen is following US 10yr yields as usual this morning, but both markets have yet to take out their NY highs from yesterday. Perhaps this acts as the near term pivot for both markets heading into this mornings UofM survey at 10amET? We find todays recovery in USDCNH (decline in the Chinese yuan) as quite notable. We think a move back above the 6.99 level would be technically positive and could foreshadow a negative US/China trade headline to come.
US 10YR BOND YIELD DAILY
Charts: Reuters Eikon
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