US data increased the doubts about FED's next plans!
The first important data of 2022 from the United States, increased the doubts over Federal Reserve's next policies. While market pricing on ending the bond purchases plan in mid-March and start raising the rates right after that, now with slower increasing economic data and faster spreading the omicron variant of Coronavirus, it can be under question!
Yesterday, the US ISM manufacturing PMI for the first time in the past three months fell under 60, to print the 58.7, which was under market expectations of 60.1 as well. From the perspective of sub-data, except for the employment index, which increased moderately to 54.2 (previously 53.3), all other indicators declined, and it is not a good signal.
This is an employment week in the US, with JOLTs, ADP, Initial Jobless Claims, and NFP! Yesterday the first data was published. JOLTs job vacancies in November fell slightly to 10.562 million, after October increase to 11.033 million. However, it is still much higher than the pre-pandemic numbers.
With weaker US data, now we can see the US dollar a bit weaker against its crosses with DXY fell under 96.20, from yesterday high of 96.45. Despite increasing risk in the market, still, US bond yields increasing. At the time of writing, we could see the US 10-years bond yields at 1.653%.
Given all these data, for today, the focus turns on the US private sector employment report published by the ADP and the FOMC's minutes of December's monetary policy meeting. Also, the IHS Markit will release the final revisions to Services and Composite PMI data for the euro area, Germany, and the US as well.
Yesterday we had the OPEC+ meeting as well. The Organization of the Petroleum Exporting Countries and allies decided to stick to the current plan with no change in the increased output by 400,000 barrels per day in February. This decision shows their confidence that overall demand wouldn’t be hit too badly by the fresh Covid outbreak.
Overall, with the weak performance data, yesterday the US dollar index tested 96.01, and then rebounded and closed at 96.28 and now also it is under pressure. However, more pressure was on the Tech stocks. With increasing the US bond yields, tech stocks were under pressure and finally caused the NASDAQ to close lower by a -1.33% loss. US benchmark 10-years bond yields were seen at a six-week high on Tuesday, while five-year bond yields hit a pandemic-era high, and two-year note yields hit their highest since March 2020 on Monday.
Given all mentioned data and events, and while ND-100 closed with a 1.33% loss yesterday, however, it lost more than 2.5% from its daily high after data was published, before slightly recovery. From the technical point of view and as you can see in the below chart, the asset has the important support at 16,150. Breaching under this level can send the asset much lower. In the intraday trading charts, technically remains bearish. In the Daily chart, the asset has strong support at 15,650, and as long as it is trading above this level, bulls will lead the way.
