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The release of the November Non-Farm Payroll reports has traders eyeing the Fed rate decisions on upcoming cuts and inclinations of Trump’s trade tariffs.
As forecasted prior, November saw 227,000 jobs added, recovering from disruptions caused by October’s Boeing strike and Hurricane Milton. However, unemployment edged up to 4.2%, and labour force participation has declined—data that could be representative of tetchy conditions beneath the surface.
Pointing at uneven recovery across industries, the report showed that healthcare, leisure, and hospitality drove job gains, yet the retail trade sector sputtered.
Wage growth held steady at 4% year-on-year. Market sentiment suggests the Federal Reserve is poised to lower rates by 0.25% during its December meeting, which aligns with a broader easing cycle.
The unemployment rate’s uptick and increased market-implied odds for a rate cut at 86% back this prediction.
Let’s take a look at how these mixed signals are shaping the broader market.
The USD Index (USDX) advanced from the 105.40 zone, reflecting traders’ anticipation of a Federal Reserve rate cut at the December meeting.
If the rally extends, levels around 106.55 or 107.00 will be key resistance zones, while a pullback toward 104.90 or 104.30 could offer buying opportunities.
EUR/USD maintained a downward bias, dropping from the 1.0630 area. Traders will closely watch 1.0490 and 1.0440 for potential support.
Any upside reversal could face resistance at 1.0710, where bearish interest might resurface.
Likewise, GBP/USD moved lower, breaking below the 1.2820 zone. Targets now focus on 1.2680, while recovery efforts could find headwinds near 1.2865 or 1.2900.
USD/JPY showed resilience as selling near 151.40 failed to gain traction.
With upward momentum building, the pair might test 152.50, though a move lower could direct attention to the 146.60 or 146.20 levels.
Meanwhile, USD/CHF extended gains, climbing from 0.8715. The 0.8835 resistance level now stands as a critical area for traders monitoring potential reversals.
AUD/USD and NZD/USD exhibited subdued price action after initial upward movements. AUD/USD faces a potential breakdown below 0.6347, with support expected around 0.6250. With NZD/USD, we see attention shift to 0.5710 or 0.5690 if bearish momentum intensifies.
Crude oil (WTI) prices remain under pressure, with crude dipping below 68.174. Further declines could test 66.938 or even 65.508 before a meaningful recovery.
Gold continues to navigate a tight range. Selling interest remains strong near 2680, while buyers might step in at 2585 or 2565 if prices retreat.
Equity markets are at a crossroads as the S&P 500 approaches the 6130 level, a zone likely to define near-term sentiment.
Bitcoin held steady near 100,000, a level traders are eyeing closely. Sustained momentum could push the cryptocurrency toward 107,530 or 110,420, but downside risks to 97,000 or 95,000 remain in play.
Natural Gas (NatGas) extended its recovery from 2.70, with resistance at 2.95 and 3.03 on the horizon. Should prices reverse, 2.70 and 2.55 may serve as supportive zones for renewed buying interest.
Tuesday brings attention to the Reserve Bank of Australia (RBA) as it announces its cash rate decision. The rate is expected to remain steady at 4.35%.
On Wednesday, the U.S. will release its Consumer Price Index (CPI) for November, forecasted at 2.7% year-over-year compared to the previous 2.6%. This data could strengthen the USD Index (USDX) further, especially if inflationary pressures support expectations of a Federal Reserve rate cut.
Thursday is packed with events across several economies. Australia’s unemployment rate is projected to tick higher to 4.2% from 4.1%, hinting at potential labour market softening.
In Switzerland, the Swiss National Bank (SNB) is forecasted to cut its policy rate to 0.75% from 1.0%, aligning with global easing trends.
The European Central Bank (ECB) is expected to reduce the main refinancing rate to 3.15% from 3.40%, reinforcing a dovish stance to support the eurozone economy.
In the U.S., the Producer Price Index (PPI) for November is due, with a forecasted increase of 0.30% versus 0.20% previously.
Friday concludes the week with the release of the UK’s GDP data for October. A slight growth of 0.1% month-over-month is expected. This is in contrast with the previous 0.1% contraction.
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