Market Overview: Focus on U.S. Employment Data, Volatility Expected for the Weekend
This Week’s Highlights
Political Developments in France and South Korea
- France:
Political instability following the collapse of the Barnier administration triggered temporary euro selling. The selling pressure on French bonds has since subsided. - South Korea:
Risk-off sentiment spiked briefly due to President Yoon’s martial law declaration and impeachment moves. However, the market has regained its composure after the initial reaction.
USD/JPY
- The pair rebounded from the 148 yen range at the start of the week to the 151 yen range, then settled into a range around 150 yen.
- Speculation of a December rate hike by the BOJ reignited following comments from a BOJ board member, prompting yen buying in certain moments.
Bitcoin (BTC/USD)
- After surpassing the $100,000 milestone, Bitcoin sharply corrected and continues to experience significant volatility.
Today’s Focus: U.S. Employment Data
Non-Farm Payrolls (NFP)
- Market Forecast: +220,000 (Previous: +12,000).
- The effects of hurricanes and protests have subsided, allowing for a return to normal job growth rates.
Unemployment Rate
- Market Forecast: 3.9% (Previous: 3.8%).
Key Scenarios
- Weaker-than-expected data:
A December rate cut will be almost certain, leading to accelerated dollar selling. - Stronger-than-expected data (close to +300,000):
Rate cut expectations will recede, pushing the dollar higher.
Other Economic Indicators and Events
Canadian Employment Data
- Employment Change: Forecast +25,000 (Previous: +14,500).
- Unemployment Rate: Forecast 6.6% (Previous: 6.5%).
- Seen as a key input for next week’s Bank of Canada meeting.
Additional Data
- German Industrial Production Index
- Eurozone GDP Final Estimate
- Canada’s Ivey PMI
Speeches and Blackout Period
- Federal Reserve governors and regional presidents will deliver final speeches before entering the blackout period.
Trading Strategies
USD/JPY
- Follow post-employment data movements. Focus on the 150 yen level as a pivot point, watching for a breakout in either direction.
- The strength of rate cut expectations in the U.S. will be crucial.
EUR/USD
- Consider selling on rallies due to political instability in France and the potential impact of U.S. employment data.
BTC/USD
- Strategy: Leverage high volatility for short-term trades. Carefully target dip buying near the $100,000 level.
XAU/USD (Gold)
- The employment data results are likely to set a clear direction. If dollar selling ensues, follow with a buying strategy.
Conclusion
Today’s U.S. employment data is a critical event that will directly impact U.S. monetary policy. The results for job creation and the unemployment rate could cause significant moves in forex markets and risk assets like Bitcoin.
Bitcoin remains a key focus. Utilize its short-term volatility and adjust strategies flexibly to capitalize on market movements.
