EUR/USD, USD/JPY Flows: Waiting on payrolls
Oil mid range for the week, waiting to see if a deal emerges and how viable it is
Otherwise focus on US payrolls. Market has been invited to react and express its opinion
Brent sitting in the middle of the week’s range, waiting on next move regarding the arrival - and as crucially viability and scope - of any deal, as well as monotiling the wider regional proxy concerns. That aside, focus today very much on payrolls, where we look for a solid 120k, though with a correction in the unemployment rate to 4.3% and a trend 0.3% earnings figure. The market is looking for around 80k but with a steady unemployment rate. It will be interesting to see how the market reacts after being positively invited to do so and express its own opinions by Warsh at the last presser (also interesting to see how any reaction is spread across the curve). Inflation data is probably the more crucial release at the moment but a hot or cold payrolls would still matter.
Late yesterday saw the dollar squeezed a little bit with USD/JPY seeing some corrective pop on the nudge above 158 before settling. On dollar bullish data, upside is to 159~ though strength is expected to run into fresh supply with focus lower later. 158~ is initial support meanwhile on any report disappointment with congestion in the 158-57 band.
Worth noting meanwhile that gold and especially silver still attempting to break out of its recent basing, silver up 3.7%. That’s a development to watch.