The small non-agricultural ADP data released on Wednesday exceeded expectations and was favorable to the US dollar, indicating that the large non-agricultural ADP will also perform well tonight. According to specific data, the latest ADP value in October increased by 239,000, the previous value was 192,000, and the expected value was 185,000, and the latest value exceeded expectations by 54,000. The pre-number non-farm value in October was 263,000, and the expected value was 195,000. On the premise that the expected decrease in new employment population month-on-month, if the announced value can be higher than the previous value, it may stimulate the sharp fluctuations of the USD index in the short term. The unemployment rate data is also worth paying attention to, with the previous value of 3.5% and the expected value of 3.6%. This expectation is mainly based on the data of September's unemployment rate higher than that of August. However, due to the overall trend of the US labor market, there is still a high probability that the unemployment rate in October is lower than the expected data (i.e., the bullish dollar index).
At 2:00 am on Thursday, the Federal Reserve interest rate resolution raises interest rates 75 basis points, the US dollar index rose 0.51% on the same day and 0.76% the next day, and the market price was at the highest point. The long-term trend of the US dollar index is significantly long, but there is still a huge crowd stubbornly bearish on the US dollar index. The Fed Chairman was very determined to raise interest rates at a press conference, but counter-trend traders still read the "dove" flavor between the lines, such as the sentence "The pace of interest rate hikes will be slowed down as soon as December." Traders need to keep a clear mind and objective attitude at all times: The Fed rate hike 75 basis point is very radical, without a slight dovish tendency, and the US labor market is also in a very healthy state, with no signs of a large-scale recession. Under this policy and the macroeconomic state, the probability of the US dollar index further rising is very high.
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The three major U.S. stock indices will also be affected by non-farm employment reports. As mentioned earlier, this large non-agricultural data may allow the market to see a healthier labor market, which is good news for US stock . However, the trend is more important than the data: the three major U.S. stock indexes are all in a medium-term short trend. Even if there is a positive effect of large non-agricultural industries, they will not have the right to boost their impact due to pessimistic market sentiment.
10-year U.S. bond yield is rising rapidly, with the highest value this month hitting a new record since November 2007. Currency is a trading subject that endorses with bonds, and funds tend to flow to markets with higher yields. As long as the US Treasury yield market remains firm, the US dollar index will have the core driving force for continued rise. The latest value of the 2-year US Treasury yield is 4.73%, and the 3-year US Treasury yield is 4.65%. The two are inverted. This means that the time point for the Federal Reserve to lower the benchmark rate of will come in two years, and before that, the interest rate will likely run at a high level.
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ATFX analyst team: Tonight's non-farm employment report may exceed expectations and be more favorable to the US dollar index, and non-US currencies, gold and platinum, and US stocks may be under pressure and downward again.
ATFX risk warning and disclaimer: The market is risky, and investment should be cautious. The above content only represents the view of the analyst and does not constitute any operational suggestions.
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