Powell sends Stocks higher and Dollar lower
01 December 2022
The last day of November was definitely very eventful on the market. In the first half, we received interesting inflation data from Australia and Eurozone, where numbers came lower than expected and lower than in previous months. Then we received mediocre ADP data, which were quickly covered by strong GDP print and nice JOLTS Job Openings. Crème de la crème was the speech from Jerome Powell at the end of the day, where he claimed that the FED will go slow from now on, which is a dovish approach in eyes of the market.
American Dollar had no other option but to give up some of the previous gains. EURUSD spiked back to the highs from Monday. USDJPY dropped to its lowest level since the end of August and AUDUSD spiked to its highest level since the middle of September. The picture is pretty clear on the currency market.
Dovish Powell is also a treat for stock traders, so indices also went up. Optimism there does not come from FED alone. We are constantly receiving new rumors that China will soon end with the zero Covid policy, which is of course said to boost economic activity worldwide. This is also positive information for Oil, which is currently having a fourth bullish day in a row. Oil was rocked yesterday also by another factor – a huge decline in inventories (-12.6M), which was the biggest one since the middle of 2019.
Today’s calendar is filled with PMIs. Those that came so far (Japan, China, Europe) came mixed, without any predominant trend. In the early stages of the American session, we will receive the most important of them: ISM Manufacturing PMI, which is expected to drop below 50.