Last weekend’s US employment statistics showed that the increase in the number of employees exceeded market expectations. The market obediently bought the dollar and reacted to the rise in US bond yields. That move was short-lived, however, as it entered the weekend with a weaker dollar and lower US Treasury yields. The market was impressed by the persistence of dollar-selling pressure.
After the sell-off of US stocks spread over the weekend due to strong US employment growth, they were bought back and closed almost at the previous day’s closing price. In the Asian market at the beginning of the week, Chinese and Hong Kong stocks remained firm. In addition to the fact that the US stock market has been well received, there are expectations for China to ease its zero-corona policy. As the dollar-yen exchange rate struggles in the 134-yen range with no sense of direction, dollar-selling is dominant against other major currencies such as the euro-dollar, pound-dollar, and Australian dollar/dollar. As a result, the cross yen is also tilting toward the yen’s depreciation.
This week, Friday’s US Producer Price Index (November) will be an important factor in understanding the latest US inflation trends. The current market forecast is for +7.2% year-on-year growth, which is expected to slow down from +8.0% in October. Excluding food and energy, the year-on-year growth is expected to slow down to +5.9% from +6.7% in the previous survey. Ahead of weekend events, the dollar selling trend is likely to continue for some time. Of course, there will also be occasional adjustments.
Continued to sell the dollar. Today, we are paying attention to the movement after the US November ISM Non-Manufacturing Index.