- US JOLTS Job Openings beat expectations but remains below 8 million job vacancies.
- Australia’s Gross Domestic Product increases to a 5-month high but does not reach previous expectations.
- The Australian Dollar significantly declines during this morning’s trading session due to the GDP miss.
- US stocks shot up after the release of the latest US Job Vacancies and the NASDAQ rose to an all-time high.
- The Euro and the US Dollar continue to move sideways as investors await further US employment data and clarity of the French political crisis.
NASDAQ Rises To An All-Time High, But Risks Remain!
The NASDAQ rose to a new all-time high at 5:40 GMT, during this morning’s Asian session. The bullish price movement seems to be due to the JOLTS Job Openings which painted a picture of resilience but was not high enough to indicate a pause in December from the Federal Reserve. According to economists, the Fed most likely would have drawn the line at 8 million vacancies. However, traders should note that the spotlight remains on NFP, the US Unemployment Rate and the inflation rate. Yesterday’s JOLTS Job Vacancies rose to 7.74 million.
Investors should also note that the above release is the second positive economic data for the US after Monday’s ISM Manufacturing PMI which rose to a 5-month high (48.4). Another positive factor is the NASDAQ remaining above the Volume-weighted average price, as the VIX index falls again and the High Low Index also continues to increase.
However, investors should note that risks still remain. Positive economic and employment data could pressure the Federal Reserve to keep the Fund Rate unchanged. This will particularly become possible if we do not see a sizable decline in inflation. Bond yields did fall towards the end of November which signals a cut from the Fed, but the 10-year bond yields are slowly rising this week.
The NASDAQ has been increasing in value for five consecutive days, and the index is trading at an all-time high. If the index fully forms a bullish candlestick throughout today’s session, investors will become vigilant of a selloff and retracement. Nonetheless, technical analysis and indicators continue to provide buy signals due to the bullish momentum. Currently, the RSI indicates the index is overbought on the 2-hour chart on a period of 18.
AUDUSD – Poor Economic Data Drives The Australian Dollar To 4-Month Low!
The AUDUSD exchange rate is trading at a 4-month low after the positive JOLTS Job data, but when analyzing each currency individually, it is clear the main driver is the Australian Dollar. The worst performing currency of the day is the Australian Dollar while the US Dollar is unchanged. What’s driving the AUD lower?
The decline is largely due to the Gross Domestic Product which rose from 0.2% to 0.3%, but fell short of the 0.5% which traders were expecting. Last Thursday, Australia’s Senate approved amendments to the Reserve Bank Act, creating a Monetary Policy Committee and a separate Board for operational management. Treasurer Jim Chalmers said the reforms would enhance the RBA’s independence, clarify its mandate, modernize its structure, and align it with regulators like the Bank of England.
The price of the US Dollar will depend on the upcoming employment data and on the Fed’s monetary policy move. The Federal Reserve has already done the unexpected on one occasion this year, if they decide to pause in December, the US Dollar is likely to significantly rise.
The AUDUSD has fallen 9 of the past 10 weeks and the price is now considerably close to a major support level at 0.63470.
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Michalis Efthymiou
Market Analyst
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