Dollar Falters as Yields Drop, Jobs Data Eyed


The dollar index which measures the greenback against a basket of major currencies fell 0.3% to 96.77 on expectations that the Fed could pause the interest rate hikes in 2019. The latest developments in the bond market, especially the inversion of the yield curve, warned investors about a possible economic slowdown. As a result, the Fed could be more cautious and adopt a wait-and-see attitude. The chance of a rate hike in December rose back to 74% after dropping to 68% yesterday. The US 10-year yields fell to 2.82%, the lowest since late August. The USDJPY traded at a five-week low of 112.23, and the USDCHF tumbled to a seven-week low of 0.9894.


Major US stock indices finished the session well-off the lows on reports that the Fed could pause the monetary policy tightening cycle. The Dow Jones Industrial Average futures rebounded from almost an 800-point plunge to settle at 24928, the S&P500 futures trimmed losses to close at 2695, and the Nasdaq futures reversed a loss of more than 200 points to close almost flat at 6842. Market participants await the monthly jobs for more information about the performance of the labor market.


The gold ounce inched higher to trade at $1244, the highest since mid-July as the dollar weakened. Meanwhile, the silver ounce settled almost flat at $14.45, while Palladium retreated from a high of $1261 to trade at a low of $1192.


Oil prices drifted lower as OPEC delayed the final decision on output cuts. OPEC agreed to cut production but will wait for Russia's final decision before deciding on the exact amount of supply reduction. The Joint OPEC-non-OPEC Ministerial Monitoring Committee will meet today. Market participants are waiting for the final decision. On the other hand, the Energy Information Administration reported that the US weekly crude oil inventories fell 7.323 million barrels last week. The West Texas Intermediate crude futures lost 2.3% to $51.69, and the Brent futures declined 2.1% to $60.25.

Major Economic Events

GMT Country Event Expectation Previous
10:00 EU GDP (YoY) (Q3) 1.7% 1.7%
13:30 US Nonfarm Payrolls (Nov) 200 250
13:30 US Unemployment Rate (Nov) 3.7% 3.7%
13:30 US Average Hourly Earnings (YoY) (YoY) (Nov) 3.1% 3.1%
13:30 CA Employment Change (Nov) 10.3 11.2
13:30 CA Unemployment Rate (Nov) 5.8% 5.8%
18:00 US U.S. Baker Hughes Oil Rig Count   887


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