Global macro overview for 06/11/2017

The NFP payrolls headlight number was expected at the level of 312k, but the number revealed was at the level of 261k. Nevertheless, this result was far better than 18k a month ago. A report from the US labor market illustrating the condition of this economic sphere in October remained under the enormous influence of the September natural disasters. The anticipated change of employment has been reflected. As expected, it had to disappoint the dynamics of wages. As a result, the most persistent element is the drop in unemployment rates to cyclical minima and to 4.1% - definitely below any estimate of natural unemployment. This means that the December rate hike is decisive. With the current demographic trends, the rushed economy is able to create more jobs than the monthly labor force widens. Despite the advancement of the business cycle, the conditions in the labor market continue to tighten.

The Fed strongly believes in the Phillips curve, that is, the relationship between the unemployment rate and inflation has thus received another argument to remain faithful to its chosen strategy. And investors' reason for several days of rebounding is the strength of the US Dollar from the previous week considered in terms of correction. The choice of Powell for the Fed Chairperson was discounted by markets before it became official.

Currently, the CME FedWatch Tool shows a 97% probability of a target interest rate between the levels of 1.25-1.50%, which basically means an almost certain interest rate hike in 13th of December. This means the US Dollar might be still appreciating across the board.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market bounced from the technical support at the level of 94.47 and is heading to test the technical resistance at the level of 95.15. In a case of a further breakout, the next resistance is seen at the level of 95.45.

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