Marc Chandler – Jobs Data Recap With A Focus On What’s Moving Commodities So Much Today
Marc Chandler, Managing Partner at Bannockburn Global ForEx and Editor of the Marc To Market website joins us to first recap the jobs data today that was mixed but in no way a bad number. This ties into a discussion on future Fed rate hikes and why a 50 basis point hike in December is likely. We then move over to the commodity sector which is experiencing a huge bounce. Gold is up almost 3%, silver up almost 7% and copper up 7.5%. A selloff in the US Dollar today is helping but “news” out of China, that was later pulled from the internet, could be the main driver.
The above takeaway that the Fed may lower the amounts of their rate hikes moving forward was the clear main driver today, and likely resulted in the further pullback in the US Dollar. Those were the key drivers moving the commodities sector higher, and the China news was simply a contributing factor.
The reality is that the sentiment in commodities has been overly bearish for months now, and so on days like this where the market sniffs out even an inkling of Fed slowing their roll a bit, and the momentum shifts back to the upside, the initial moves seen are typically short-covering rallies as people cover their shorts on the futures markets. Nice to see the shorts get squeezed to end the week.
Gold closed the week up above the first key resistance at $1675, (closing at $1676.60, and heading up to $1684 in afterhours trading).
Silver rocketed higher today closing at $20.78 (up to $20.92 in afterhours trading).
A nice green day and nice way to end the week… 🙂
Cryptos and other risk assets were also up bigly today, and that didn’t have anything to do with China, but was due to the market expectations about how the Fed may slow down the amount of the rate hikes at the next few meetings and the correlating weaker US dollar.
Wall St Climbs As Jobs Data Supports Smaller Rate Hike Prospects
Amruta Khandekar – Reuters – Nov 04, 2022
“Wall Street’s main indexes climbed on Friday after an uptick in the U.S. unemployment rate in October overshadowed data showing strong jobs growth and supported hopes that the Federal Reserve could deliver smaller rate hikes in the future.”
“The U.S. Labor Department’s closely watched non-farm payrolls report showed a rise in the unemployment rate to 3.7% last month from 3.5% in September, suggesting some loosening in labor market conditions that could give the Fed cover to shift towards smaller rate increases next month.”