As Dollar Gains Traction, Yields Stage Resilient Comeback in Dynamic Economic Landscape

As the Asian markets unfold, a cascade of economic indicators is set to shape the day’s financial landscape. Japan kicks off with pivotal jobs data, while New Zealand unveils insights into consumer confidence. Moving through the session, China takes the stage with the release of the influential Caixin Manufacturing PMI. Meanwhile, Switzerland enters the spotlight with Q3 GDP figures, alongside the final manufacturing PMIs. Across the Pacific, Canada unveils its employment report, and in the United States, attention turns to the ISM Manufacturing PMI. Adding to the day’s significance, Federal Reserve Chair Powell is slated to participate in two key events, underscoring the global economic pulse.

Market Insights: US Economic Data, Bond Yields Rebound, and Global Trends Unveiled

In Thursday’s US data release, the Core PCE Price Index dropped to 3.5% in October, meeting expectations. Initial jobless claims stood at 218,000, but continuing claims rose to 1.927 million, the highest since November 2021. Friday’s focus is on the ISM Manufacturing PMI, with Fed Chair Powell participating in key events. Government bond yields rebounded, pressuring the Japanese Yen. The 10-year Treasury yield rose from 4.25% to 4.36%, and German yields increased from 2.40% to 2.46%.

On Wall Street, Nasdaq declined while Dow Jones aimed for its highest close since January 2022. US data hinted at a softening labor market, suggesting the Fed might not raise interest rates, pleasing investors.

China’s NBS PMI disappointed, affecting risk sentiment. Friday awaits the Caixin Manufacturing PMI release.

The US Dollar Index (DXY) showed strength, surpassing 103.50. Future moves hinge on US fundamentals, possibly preventing fresh lows.

The Euro underperformed due to a slowdown in Eurozone inflation. EUR/USD fell below 1.0900, EUR/GBP approached 0.8600, and EUR/CHF hit one-month lows below 0.9500. Friday brings the final Manufacturing PMI reading, with no expected revisions, but the market remains open to surprises.

Various Market Snapshots

USD/CHF initiated a turnaround, hitting a nadir at 0.8680 before staging a robust rebound beyond 0.8750, suggesting potential indications of a short-term bottom. The Swiss Franc, demonstrating remarkable resilience, stood out as a top performer for the second consecutive day. All eyes are on Friday for Switzerland’s Q3 growth data, poised to introduce potential shifts in the market landscape.

USD/JPY displayed formidable resilience despite a deceleration in US consumer inflation. Fueled by higher US Treasury yields and dovish sentiments from Bank of Japan officials, the pair found support at the 100-day Simple Moving Average (SMA) at 146.90, ascending to 148.50. While downside risks linger, the prospect of occasional sharp rebounds remains plausible. Friday’s schedule includes additional reports from Japan, encompassing the unemployment rate, capital spending, and the final manufacturing PMI.

GBP/USD underwent a corrective downward movement, logging its most challenging day in a month and nearing 1.2600. However, maintaining levels above 1.2430 preserves an upward bias.

USD/CAD maintains its lateral trajectory above the 100 and 200-day simple moving averages. The Canadian employment report on Friday anticipates a positive net change in employment of 15,000 and a slight uptick in the unemployment rate from 5.7% to 5.8%.

AUD/USD exhibited minimal changes around 0.6600 after bottoming at 0.6570, signaling a short-term downside bias within the overarching uptrend. Friday is set to unveil the final Judo Bank Manufacturing PMI.

NZD/USD stabilized around 0.6150, suggesting an impending consolidation. The ANZ-Roy Morgan Consumer Confidence Report for November is eagerly awaited on Friday.

Gold (XAG/USD) experienced a retracement below $2,040 following a five-day ascent, with the limited correction attributed to dynamics in the bond market. In contrast, silver bucked gold’s descent as XAG/USD ascended, closing above $25.00, marking its strongest level since May.

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