Employment Statistics
How to read articles
Basics of the entry
October Scenario
Dow average 32000－28500
If the current optimism wears off, 30000 may become a ceiling gradually.
Dollar/Yen
147－142 yen
Moving in a high-price range.
thanks to intervention, it has become harder to rise, but fundamental fundamentals have not changed.
This month too, will CPI be a turning point?
Twitter Cast password
【elegogo1000】
Right now we are waiting for events, so there is no clear direction for the past three days.
Nevertheless, there was something I felt in the price movement, so I wrote this article.
Today the U.S. employment statistics will be released.
Forecast: nonfarm payrolls +250,000, unemployment rate 3.7%, average hourly earnings flat +0.3%
The author’s prediction varies and I think it may not lead to a clear move in price.
Average wages aren’t likely to loosen much, and with job openings vastly higher, wage declines are usually difficult.
In that environment, even if employment numbers move up or down slightly, it’s unlikely to alter the big picture, so positions may be hunted up and down and end there.
However, apart from the contents of the event, crossing the milestone of employment statistics may weave in recently released factors, so I want to separate them in thinking.
Given ADP softness and rising unemployment claims, a slowdown in employment stats is expected by many, so upside surprises could lead to larger price ranges, likely in risk assets to the downside.
Rising bond yields and the market staying high
Yields have recovered to about half of the decline that began in September.
The dollar index has recovered to a similar level, and the bond and currency markets are moving consistently.
The stock market is somewhat elevated, and there are gaps as rate cuts are priced in.
Movements are likely to be large on the downside, and upside remains very heavy.
Regarding interest rates, each country continues tightening, and with rate hikes not yet stopped, the downside in yields will be limited.
That means upside for risk assets should be capped, keep that in mind.
S&P 3800, Dow at 30400 dollars would be a key level, so unless we break through this, upside may be limited.
Even on a horizontal axis, there is little time until CPI, and looking back at past markets, optimistic CPI is unlikely, so how much upside remains can be inferred.
Key point: at current interest rate levels, it remains high.
There isn’t enough time before the event for full pricing of optimism, limiting upside.
From July’s reflections, even if employment stats ease, the Fed will not ease its stance and will simply keep repeating the same language, acting like a recording.
Then the market-driven optimism will be the determining factor.
I’ve tweeted this a few times, but being blocked by the upper limit of this expansion chart is very painful.
Being inside this, there is no real back to push for higher highs or lower lows, so trading becomes difficult.
Experience says when the short-term line breaks, it tends to move down, so it doesn’t look like a buying-the-dip scenario.
Nikkei Average is moving toward a head-and-shoulders formation.
If there is a buying opportunity, it would be near the neckline, but it depends on U.S. stock movements.
Cable continues to weaken as European selling returns.
With 1.123 acting as resistance, it seems to be aiming for the next support around 1.103.
If EURGBP stays below 0.87, you can sense pound strength; but since it has moved back up, it will be hard to maintain a bullish view on the pound.
In a environment where euro is weak and the pound is sold, even with dollar selling, upside is limited, so the weakness has been evident these days.
AUD is approaching the panic levels seen in the UK again.
Stocks have been holding, but risk currencies are not being bought even with crude oil at high, and this time too only stocks remain high, which reflects the overall environment.
GOLD, like Bitcoin, is held up by currency-hedge demand that keeps it high.
Not a hedge against wide global currency depreciation like during easing periods, but rather a hedge as a dollar complement, so when viewed in dollars-denominated assets, upside growth is difficult to sustain.
However, downside is also firm, and the range is narrow for a long period (though about $100 wide).
Neither breaking above nor below, and not moving aggressively, possibly for another year.
From a level perspective, selling is higher risk-reward.
Looking at yesterday’s movement, moving Dow above 30300 seems very heavy, and unless there is optimism strong enough to deserve a reprimand from the Fed, breaking this level looks unlikely.
It’s also worrying that European stock selling is leading recently, and if U.S. stocks swing to the upper limit of the expansion chart, high prices may be met with selling opportunities.
I don’t plan to watch the upcoming employment statistics closely, so I don’t hold a position, but if you have a short around 30400 dollars, I would personally hold it through CPI.
Since I don’t have it, there’s nothing to say about it….
These past three days, position adjustments ahead of indicators have dominated, so there isn’t much direction.
But the weight on the upside is noticeable, and when it rises, it tends to rise with short-covering in the short term.
Regardless, it’s the employment statistics day, so analysis can wait until after it’s released.
CPI is the 13th after the holidays, so how far can it extend in three trading days?
Honestly, I would have preferred to see Dow around 31000 as of now if the employment statistics remained optimistic.
I plan to move at the end of this month to early next month.
Internet access will be prioritized, but there may be some disruptions.
In that case, I’ll monitor with live streams on my smartphone at the end of the month/start of the month.
※This article does not instruct or recommend buy/sell timing.
Please make your own investment decisions.
