- Stocks push higher into the close. Snatch victory from the jaws of defeat
- Key events and releases for next week
- WTI crude oil futures settle at $99.27
- European Commission says gas companies should pay Russia in dollars or euros
- Atlanta Fed GDPNow estimate ticks up to 1.5% from 1.3% yesterday
- Baker Hughes oil rigs rise 2 to 533 vs 531 last week
- Amazon workers vote to unionize in New York
- US 2s30s curve inverts
- Major European indices close higher on the day
- Fed's Evans: It's not a big risk if rate hike path includes some 50 bps hikes
- Biden: More American workers have real power now to get better wages
- ECB's Knot: Today's inflation is water under the bridge
- US construction spending for February 0.5% versus 1.0% estimate
- ISM March US manufacturing 57.1 vs 59.0 expected
- S&P Global US March manufacturing PMI 58.8 vs 58.5 prior
- Canada Markit March manufacturing PMI 58.9 vs 56.6 prior
- Fed's Evans: Expects 7 hikes this year and 3 next year
- US March non-farm payrolls +431K vs +490K expected
- The AUD is the strongest and the JPY is the weakest as NA traders enter for the day
The US jobs report came in close enough to expectations inclusive of the revisions. The NFP came in at 431K vs 490K estimate but the prior month was revised up 72K to 750K from 678K. The January revision added another +23K. The Unemployment rate was lower at 3.6% (vs 3.7%). Goods producing jobs have added 200K over the last 3 months. Service jobs have added 1463K over that time. Leisure and Hospitality added 112k, while higher paying Professional and business services added 100K for the 2nd consecutive month.
The report keeps the Fed on target for a 50 BP hike/hikes at the May and most likely June meeting as well. That would take the target rate to 1.25% to 1.50%. That leave 4 meetings to the end of the year. Rises of 25 basis points at each takes the target rate to 2.25% to 2.5%, which is the so called neutral rate that Fed officials speak to.
Current rates 2 years and out are currently near those level, doing the Fed's job for them:
- 2 year, 2.462%
- 5 year, 2.56%
- 10 year, 2.386%
- 30 year, 2.436%
The yield curve from 2-10 years inverted today to -7.6 basis points which tends to foreshadow a recession afterwards. When that happens can be delayed, but the bond market is hoping inflation - which is north of 7% now - starts to come back down. Otherwise, there certainly is room to roam yet in yields.
In the forex the , the AUD and the USD are ending the day as the strongest of the majors, while the JPY is the weakest.
The USDJPY snapped it's 3 day decline after running higher for most of March. The correction for the pair off the high, stalled the fall this week near the 38.2% at 121.12 (the low reached 121.29 this week before moving back to the upside today).
The EURUSD tried to extend back below the ubiquitous 200 hour moving average once again today after breaking above it on Tuesday's surge the upside. The 200 hour moving average comes in at1.10405. The low price reached 1.10272 before rebounding back to the upside and closing near 1.1049. The 200 hour MA will be a key barometer in early trading next week.
The GBPUSD moved back below its 100 hour MA at 1.31196 but found willing buyers near a support swing area between 1.30783 and 1.30878 (the low reached 1.30855. The price did rebound into the close to 1.3115 - just below the 100 hour MA. Next week the pair will use that 100 hour MA as IT'S early barometer. Move above is more bullish. Stay below keeps the sellers in control.
The USDCHF fell below both it's 100 and 200 day MAs during trading yesterday at 0.9234 and 0.9211 respectively, but rebounded higher today. However, the high for the day stalled right near the falling 100 hour MA (currently at 0.9272, increasing that levels importance into the new trading week). A move above the 100 hour MA is needed to give the buyers some comfort. Conversely, a move back below the 100 day MA at 0.9234 would increase the sellers confidence.
The USDCAD was able to extend above the 200 hour MA (and close above on the hourly chart) at 1.25216 for the first time since March 15. However, the momentum stalled and the price moved back into the 200 hour MA above/100 hour MA below box. The 200 hour MA is at 1.25216. The 100 hour MA is at 1.2500. The closing price is at 1.2509. Those MAs continue to be the levels that will help define the bias in the new week. PS the MAs are flattening and converging. So the market is getting ready for a move next week.
Speaking of confined trading ranges, the AUDUSD is in day 8 of a 90 pip trading range. It's 100 and 200 hour MAs are converged at 0.7497. The closing price is 0.7496. Something has to give. Either move higher and continue to move to the upside above 0.7539, OR move below the MAs, and crack below 0.74497.
In the NZDUSD, it rallied in the European session, erasing the Asian sessions decline, but stalled near it's 200 hour MA at 0.6944. The subsequent fall, took the price below its 100 day moving average at 0.69054, but found support against the 38.2% retracement of the move up from the March 15 low at 0.68946. The price recovered into the close and is ending the day near 0.6920. That takes price below the 100 hour moving average at 0.6934, but above its 200 day moving average at 0.69054. Traders will be watching those levels for bias clues the early trading next week.
In other markets to end the week:
- Spot gold fell all dollars and $0.71 today or -0.66% to $1923.61. The low price for the we stalled their the 61.8% retracement of the move up from the January 28 low near $1890.51. The closing price is near the 50% midpoint of that same range at $1924.86
- WTI crude oil settled at $99.27 and is trading at $99.42 after hours. The closing level last Friday was at$113.90. So for the week, there was a sharp move to the downside as China Covid, and at times, hope for a de-escalation of the war in Ukraine sent prices lower
- Bitcoin is trading at $46,339 heading into the weekend. Of course the digital currency trade 24/7. The high prices this week extended toward its 200 day moving average of $48,322.29, but found willing sellers against that key moving average level (the high price reached $48,234)
Wishing all a happy and safe weekend