Stronger than expected earnings and jobs data in the USA hsa firmed the USD and restained stock markets.
- The major event in the market in recent hours was yesterday's delayed release of high-impact US economic data, with average hourly earnings increasing by 0.4% month-on-month (0.3% was expected) and net new non-farm payrolls coming in higher at 130k (66k was expected). This puts a little hawkish pressure on the Fed, as it does not indicate an economy ready for further rate cuts. However, the CME FedWatch tool still expected the Fed's next action to be a 0.25% rate cut at its June meeting. The data firmed up the US Dollar, which is really now just consolidating, and may be holding back stock markets a little.
- The Japanese Yen continued to make strong gains yesterday, as it has been doing all week, but during the Tokyo session top currency diplomat Mimura warned against excessive volatility and made a weak implied threat of intervention. This seems to have halted the Yen's rise until now, although it is still holding up and refusing to fall by much. If the Bank of Japan want to send the Yen lower though, it will be very easy for them to accomplish this, so overall we might be seeing a bottom in the USD/JPY currency pair. Several of the Yen crosses have made strong moves in favour of the Yen this week on unusually high volatility.
- Stock markets generally are bullish but have mostly been trading sideways. The benchmark US index the S&P 500 remains near its record high not far above 7,000 and continues to print subdued bullish price action, but does not look likely to make a strong bullish breakout right now. The Korean KOSPI Composite Index has risen strongly to close at a new record high price.
- Gold is the strongest of all precious metals, and it is still able to trade above the key round number at $5,000 for the second day running, which means it is building a bullish case. However, it is starting to look weaker and as if it might break back down below $5,000 on the strong US economic data released yesterday.
- Bitcoin is still looking essentially bearish as it keeps failing to break above the key resistance level at $71,762. At the time of writing, the short-term price action is bearish too as it trades below $67,000.
- In the Forex market, since today's Tokyo open, there has been little sustained directional movement. The pair I see as most suitable for day trading today is the AUD/USD on the long side. During the Asian session, or even during the New York session, it might be better to trade the USD/JPY.
- There will a release of US Unemployment Claims data today.
- Earlier today, UK GDP growth came in as expected, showing a month-on-month growth of 0.1%.