Jerome Powell's Upcoming Speech: The Implications for Dollar and Indices.
19 October 2023
Hello traders, welcome to our Thursday roundup. The hustle and bustle of the financial markets remain palpable, and today is no exception.
Starting off with the land down under, Australia's employment data presented a mixed bag. While the unemployment change undershot expectations, recording a mere 6.7 thousand against a forecasted 20 thousand, it wasn’t all gloomy. The silver lining manifested in the unemployment rate, which dipped slightly to 3.6%, down from the previous 3.7%.
Shifting our focus to a potentially game-changing event later in the day, Jerome Powell's speech is eagerly anticipated. Scheduled after the European session's close, it promises key insights that could influence trajectories for both the dollar and global indices.
Speaking of the greenback, its strength has been the talk of the trading floors. Just yesterday, while the Swiss franc led the pack, the American dollar wasn't far behind, showcasing its mettle as the second strongest contender. Accompanying it in the gains, the Japanese yen, another safe-haven currency, flexed its muscles. This renewed vigor in safe-haven currencies stands in stark contrast to the commodity currencies like the New Zealand dollar, Australian dollar, and Canadian dollar, which languished at the other end of the performance spectrum.
Over to the world of indices, there's a discernible change in mood. The upbeat sentiment that marked the first half of October seems to be fading. The DAX's trajectory paints a telling picture. Hovering precariously close to its mid-term lows, it’s eyeing the 14,700-points mark, closely aligned with the 38.2% Fibonacci retracement. While other indices are putting up a valiant fight against recent corrections, one can't help but sense that the earlier optimism is evaporating.
As we delve into commodities, the picture brightens. Both precious metals and oil have been on a bullish spree. Yesterday was particularly good for them, and there's little to suggest this bullishness is losing steam. Gold and silver shine bright, and oil continues to surge, perhaps drawing strength from geopolitical tensions and supply constraints.