Daily Outlook – Monday 5th June
- USD Index (USDX) Took a hit lower to 75 after Friday’s U.S. jobs data release. Generally soft, with US Non-Farm payrolls & Trade Balance a miss. There were some positives in the release with Unemployment ticking down slightly to 4.3% and Average Hourly Earnings holding steady, but the USD sold as the headline new jobs number was underwhelming.
- Traders still see US Rate Hike for this month, but doubts cast on forward guidance for further hikes meant that an unwinding of USD long positions dominated the US session on Friday.
- Aussie dollar found support on Friday night, jumping back to 0.7445 against the Greenback, on the US jobs report, after a wild week caused by stronger local retail sales, then softer China Data driving AUD lower on the longer trend timeframes.
- Australia’s RBA widely tipped to hold firm the Aussie cash rates tomorrow but we also see China Trade Balance data hit on Wednesday so it may be a pivotal week for AUDUSD direction.
- Kneejerk moves in FX saw EURUSD push higher to the 1.1290 level at the same time USDJPY came off to 110.40, after holding around the 111 handle most of last week, as USD sold off across the board generally.
- A quieter start to the week for our Asian dealing session leads into a huge week of data & event risk opportunities, kicking off with UK Services PMI, but the real focus starts to shift towards the UK Elections and the ECB, both on Thursday.
- Volatility (VIX Index) still low 9.75 as trader’s digest what the US jobs data means for the Rate Hike path for the US Fed. We still have a high probability of June rate hike, but doubts now cast on the future moves in interest rates.
Today’s Economic calendar (AEST)
- 30pm Services PMI (UK)
- 00am ISM Non-Manufacturing PMI (US)
| Russell Sandiford / Market Analyst |
| Russell@easyMarkets.com
Sydney T:1800 176 935 F: +612 9299 6800 Singapore (local call) 31583201 New Zealand (Toll Free) 0800442358 |
