<p style=““ class=“text-align-justify“>Amid the lack of change in the major currencies space, this is one of the only notable pieces of action in trading so far today. 10-year Treasury yields are also pretty much flat again on the day, relieving USD/JPY buyers of their impetus at the moment. The pair <a target=“_blank“ href=“https://www.forexlive.com/news/usdjpy-nudges-higher-to-test-key-near-term-level-to-start-the-session-20221206/“ target=“_blank“ rel=“follow“>ran up to test</a> its 200-hour moving average (blue line) earlier but for now, sellers are holding the line.</p><p style=““ class=“text-align-justify“>As such, the near-term bias stays more neutral after the developments from yesterday – in which we saw price climb back above 135.00 and its 200-day moving average, as well as the 100-hour moving average (red line) above.</p><p style=““ class=“text-align-justify“>For now, price action is caught in a near-term tussle in determining the next directional bias before we look at the bigger picture levels on either side again.</p><p style=““ class=“text-align-justify“>The dollar remains little changed overall today, trading within 0.1% against other major currencies with only AUD/USD up 0.3% to 0.6720 – owing to the RBA policy decision earlier in the day.</p>

This article was written by Justin Low at forexlive.com.

<p style=““ class=“text-align-justify“>Timiraos has been a sort of Fed whisperer as of late, so it is something to follow in case his remarks or views have any juxtaposition with prevailing market sentiment. Think back to how markets used to follow Hilsenrath when it came to Fed commentary.</p><p style=““ class=“text-align-justify“>In any case, this is the latest by Timiraos and it makes for an argument that while the Fed could slow down their pace of tightening this month, policymakers could allude to higher rates next year – more than what investors are expecting now.</p><p style=““ class=“text-align-justify“>A 50 bps rate hike seems to be what policymakers are favouring next week and that is what markets are expecting already at the moment. However, the infamous dot plots is going to be a major focus point and Timiraos says that „elevated wage pressures could lead them (Fed) to continue lifting it (interest rates) to higher levels than investors currently expect“.</p><p style=““ class=“text-align-justify“>The September projections showed that most policymakers saw rates rising towards 4.50% and 5.00% next year but that ‚landing zone‘ could be lifted towards 4.75% to 5.25% in next week’s latest projections.</p><p style=““ class=“text-align-justify“>You can view the full report <a target=“_blank“ href=“https://www.wsj.com/articles/fed-could-pencil-in-higher-interest-rates-next-year-while-slowing-hikes-in-december-11670208857?mod=latest_headlines“ target=“_blank“ rel=“nofollow“>here</a> (may be gated).</p><p style=““ class=“text-align-justify“>In any case, the bond market reaction is the one to watch in my view and over the past few weeks, a less hawkish stance has seen rates fall considerably to reach near a critical juncture as noted <a target=“_blank“ href=“https://www.forexlive.com/news/the-bond-market-is-still-a-key-spot-to-watch-this-week-20221205/“ target=“_blank“ rel=“follow“>here</a>. If bond traders interpret the Fed’s outlook as one that is still leaning more towards the hawkish side, the dollar could yet catch a much needed break heading towards year-end; vice versa.</p>

This article was written by Justin Low at forexlive.com.

<ul><li>Haven’t reached the stage that we are confident inflation is under ccontrol</li><li>Anticipates that there will be further rates hikes next year</li></ul><p style=““ class=“text-align-justify“>That at least gives some idea of what to expect but on the balance of things, markets are arguably leaning towards a 50 bps move anyway at this juncture. The Fed may be the main focus next week but don’t forget about the ECB as well.</p>

This article was written by Justin Low at forexlive.com.

<ul><li>Prior +0.4%; revised to +0.8%</li><li>Retail sales -2.7% vs -2.6% y/y expected</li><li>Prior -0.6%; revised to 0.0%</li></ul><p style=““ class=“text-align-justify“>Euro area retail sales were weaker than anticipated in October but that comes after a bit of a positive revision for September. In any case, the dip continues to highlight weakening demand conditions – which has become more prevalent in Q4, suggesting that a recession is likely in the works.</p>

This article was written by Justin Low at forexlive.com.

<p style=““ class=“text-align-justify“>This adds to the earlier news and weekend measures <a target=“_blank“ href=“https://www.forexlive.com/news/china-reportedly-may-announce-more-supplementary-covid-measures-this-week-20221205/“ target=“_blank“ rel=“follow“>here</a>. After the lockdown protests in the week prior, it has been a big change of pace in China’s plans in dealing with the pandemic. I reckon in the bigger picture, the question is how will a major re-opening for China play into global inflation developments? That will be something to think about.</p>

This article was written by Justin Low at forexlive.com.

<p>Chengdu and Tianjin said previously that they would no longer require people to show a negative Covid-19 test result to use public transport or enter parks.</p><p>Shenzhen has announced the same. </p><p>In Beijing many testing booths have been Closed. Beijing has stopped requiring negative test results as a condition to enter places such as supermarkets. From Monday that requirement for subways will be dropped also. </p><p>The evidence is clear that China is now taking many more stope to make its zero-Covid-19 policy more targeted. They’d been saying the words but now action is becoming concrete.</p><p>Just a few of the posts from last for on this:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/china-reportedly-to-reduce-frequency-of-mass-testing-and-regular-pcr-tests-20221201/“ target=“_blank“ rel=“follow“ data-article-link=“true“>China reportedly to reduce frequency of mass testing and regular PCR tests</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/china-is-speeding-up-to-cast-aside-large-scale-lockdowns-20221201/“ target=“_blank“ rel=“follow“ data-article-link=“true“>“China is speeding up to cast aside large-scale lockdowns“</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/china-official-behind-strict-covid-lockdowns-softens-her-stance-20221201/“ target=“_blank“ rel=“follow“ data-article-link=“true“>China Official Behind Strict Covid Lockdowns Softens Her Stance</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/chinas-guangdong-province-to-allow-close-contacts-of-covid-cases-to-quarantine-at-home-20221129/“ target=“_blank“ rel=“follow“ data-article-link=“true“>China’s Guangdong province to allow close contacts of Covid cases to quarantine at home</a></li></ul>

This article was written by Eamonn Sheridan at forexlive.com.

<p>In the weekend forex report, Greg Michalowski of Forexlive.come, reviews the fundamentals in play and the importance, and then outlines the bias and risk defining levels for each of the major currencies vs the USD:</p><ul><li>EURUSD (5:51)</li><li>USDJPY (10:13)</li><li>GBPUSD- (13:18)</li><li> USDCHF (16:42)</li><li> USDCAD (18:21)</li><li> AUDUSD (19:52)</li><li>NZDUSD (22:53)</li></ul>

This article was written by Greg Michalowski at forexlive.com.

<ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-november-non-farm-payrolls-263k-vs-200k-expected-20221202/“>US November non-farm payrolls +263K vs +200K expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/canada-november-employment-change-101k-vs-50k-estimate-20221202/“>Canada November employment change 10.1K vs 5.0K estimate</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/poland-formally-agrees-to-60-russian-oil-price-cap-with-review-mechanism-20221202/“>Poland formally agrees to $60 Russian oil price cap with review mechanism</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/freeport-lng-now-says-it-will-restart-initial-production-around-year-end-20221202/“>Freeport LNG now says it will restart initial production around year-end</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-evans-we-are-on-a-path-to-get-financial-conditions-appropriately-restrictive-20221202/“>Fed’s Evans: We are on a path to get financial conditions appropriately restrictive</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/timiraos-strong-jobs-report-keeps-the-fed-on-track-to-hike-by-50-bps-20221202/“>Timiraos: Strong jobs report keeps the Fed on track to hike by 50 bps</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-barkin-labor-supply-looks-like-it-will-remain-constrained-20221202/“>Fed’s Barkin: Labor supply looks like it will remain constrained</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-de-guindos-we-are-seeing-that-inflation-is-starting-to-slow-down-20221202/“>ECB’s de Guindos: We are seeing that inflation is starting to slow down</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-de-guindos-november-inflation-data-has-been-good-news-20221202/“>ECB’s de Guindos: November inflation data has been good news</a></li></ul><p>Markets:</p><ul><li>Gold down $5 to $1797</li><li>WTI crude oil down 99-cents to $80.22</li><li>US 10-year yields down 2.4 bps to 3.50%</li><li>S&P 500 down 10 points to 4072</li><li>JPY leads, CAD lags</li></ul><p>The US dollar was soft all week in the lead-up to non-farm payrolls and that was particularly true of USD/JPY in the hours before the release as the pair touched 133.64 early in Europe. With a strong bid in bonds, the market is seeing a Fed peak or creeping economic weakness.</p><p>So naturally non-farm payrolls were strong and the latest batch of dollar bears was stung by a quick roughly 150 pips US dollar rally across the board. The main headlines on jobs and wages were strong with hourly avg hours up 0.6% compared to 0.3% expected.</p><p>Then it all came slowly undone. People began to pick holes in the wages story with hours worked ticking lower. Then they looked closer a the household survey and noted another decline and a flat trend since March:</p><p>The result was a slow give-back of all the US dollar gains. That left the euro and pound largely unchanged on the day with USD/JPY down a full cent.</p><p>Helping the move was a relentless long-end led bid in bonds for the second day. US 30s fell 9 bps to 3.54% from a high of 3.70% shortly after the jobs report. </p><p>The Canadian dollar also had a jobs report to deal with and it was upbeat with a 50K increase in full time jobs. That makes next week’s BOC meeting a bit more intriguing with the market 76% priced for 25 bps but with the remainder on 50 bps. The loonie underperformed but that was on a reversal in oil prices with the OPEC+ meeting on Sunday looming and the G7 oil price cap set to go into effect on Monday. </p>

This article was written by Adam Button at forexlive.com.

<p>As stocks moved back higher and yields moved lower, the US dollar is getting weaker.The USDJPY is back below its 200 day moving average of 134.506. Closing below the level today would be the first time the currency pair closed below that since February 23, 2021.</p><p>The USDJPY moved higher after the stronger than expected jobs report. However momentum faded near the 38.2% retracement of the week’s trading range. That level comes in at 136.009. The high price reach 135.997.</p><p>Since then, the price is been stepping lower and has now moved back below the 200 day moving average trading at 134.35.</p><p>Earlier in the day, the low price reach 133.611. That is the next target on further downside momentum. Below that, the 50% midpoint of the 2022 trading range cuts across a 132.70, followed by the 131.24 to 131.483 area. That area corresponds with swing highs and lows going back to April, May, and June (see red numbered circles on the daily chart below).</p>

This article was written by Greg Michalowski at forexlive.com.

<p>We’re back to where we started.</p><p>US markets have completely erased the moves after the strong non-farm payrolls report. The S&P 500 is now down just 5 points to 4071 and on track for a weekly close above 200-day moving average for the first time since April. It’s an impressive performance.</p><p>More curious is the relentless bid in long-dated bonds. US 10s are down 3 bps to 3.49% from a high of 3.63%. US 30s are down 8 bps to 3.55% from a high of 3.70%.</p><p>One line of thinking is that bond market participants are trying to get ahead of ‚the next big trade‘ which is the weakening of the global economy and a fall in inflation. Whatever it is, the decline in yields is sapping the US dollar.</p>

This article was written by Adam Button at forexlive.com.