US jobs came in strong again is somewhat eased. Goldman:
Total nonfarm payroll employment increased by 261,000 in October, and the unemployment rate rose to 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in health care, professional and technical services, and manufacturing.
…The change in total nonfarm payroll employment for August was revised down by 23,000, from +315,000 to +292,000, and the change for September was revised up by 52,000, from +263,000 to +315,000. With these revisions, employment gains in August and September combined were 29,000 higher than previously reported.
The small rise in unemployment was enough to push the US dollar lower but the bigger factor is the crazed short-squeeze in Chinese and associated assets on hopes of a post-COVID reopening.
When global growth is stronger than US, DXY will fall all things equal, and a reopening of China lifts not just itself but Europe and EMs.
Is it coming? Inevitably. But not through Winter and it is likely to be slow and steady after that. China is not ready in terms of vaccine rates or health infrastructure.
In short, it could take most of 2023 to do it so it’s no answer to global growth.
Moreover, the market reaction is amusing for hopes of falling inflation and the Fed pivoting dovish: a falling DXY reflating EMs and S&P profits, oil and base metals breaking out, credit spreads contracting, stock markets booming and US import inflation surging.
This is the precise opposite of the what Fed wants to see as US inflation remains not just sticky but firming:
Of course, any hint of a falling DXY coupled with a rising China is going to do exactly what happened to the AUD, which is behaving more and more like a penny stock, not major currency.
I see this as a China short-squeeze and chance to reset for more AUD selling.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed. Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website. Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
