Swiss Inflation, Manufacturing PMIs and U.S. Job Numbers In Focus

Japanese Data And Manufacturing PMIs From Around The World

Today, during the early hours of the Asian morning, Japan delivered some of its Q1 Tankan manufacturing and non-manufacturing figures, which measure the general business conditions in those sectors. The Tankan large manufacturers index was expected to fall slightly, going from 18 to 12, however it came out at 14, managing to beat the forecast. The reading was still on the lower side, comparing to the previous one, which got adjusted to 17. The non-manufacturing one was forecasted to drop from 9 to 5, but showed up at 9, as the previous reading got adjusted to 10. Japan also delivered its manufacturing PMI figure for March, which was able to beat both, the previous 52.7 and the forecasted 53.2, coming out at 54.1. After the data came out, the Japanese yen did not react much, as it remains vulnerable to the broader market sentiment.

GBP/CHF — Technical Outlook

GBP/CHF continues to move lower, while trading below a short-term tentative downside resistance line taken from the high of March 23rd. In addition to that, the pair is still below all the EMAs on our 4-hour chart, which may also be seen as a bearish indication. That said, we would prefer to wait for a break below yesterday’s low first, which is at 1.2095, and then go for lower areas.

U.S. Employment Data Takes Centre Stage

However, the main event on the economic calendar for most market participants will be the U.S. jobs numbers for the month of March. Currently, the unemployment rate is forecasted to drop slightly, going from 3.8% to 3.7%. The non-farm payroll reading is expected to decline, going from 678k to 490k. For the past two months, the number was able to beat its initial forecasts, however, this time economists are a bit more sceptical, as the current inflationary pressures are forcing some businesses to rebalance their books and slow down the recruitment of new workers. Another important U.S. jobs number, which will get released, will be the average hourly earnings on a MoM and YoY basis. The current expectation is for a decline in the MoM figure, going from +0.6% to +0.4%. However, the YoY number is believed to have improved from +5.1% to +5.5%, which could mean that, although job creation might have slowed down a bit, the existing employees are demanding higher wages, due to rapidly rising inflation. Quickly rising inflation is a big concern for the Fed. It is keeping a close eye on these indicators, in order to determine its aggressiveness towards future rate hikes. According to the CME FedWatch tool, it is expected to have the rates in the range between +2.50% and +2.75%.

EUR/USD — Technical Outlook

After pushing above all of the EMAs on our 4-hour chart in first half of this week, EUR/USD is now seen pushing lower. That said, the pair continues to trade above a short-term tentative upside line drawn from the low of March 7th. Even if the rate drifts a bit lower, as long as it stays above that upside line, we will continue aiming higher.

As For The Rest Of Today’s Events

In addition to the job numbers, the U.S. will release the ISM manufacturing PMI figure for March. That reading is expected to have improved slightly from 58.6 to 59.0.

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