ThinkMarkets - Analytics

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    US Jobs Keep Strengthening along with Manufacturing

    US Jobs data continues to increase and wages also rebounded. This will enable the Federal Reserve to gradually raise rates this year.

    It was forecasted for Non-Farm Payrolls to increase to 206K, actual reading came in at 215K but the unemployment rate ticked up slightly from 4.9% to 5.0%. With a rapid burst in hiring over the last couple of years, employees have not seen their wages grow. We saw in February wages decline, this time around wages rose by 2.3% annually, beating 2.2% forecast with an increase of 0.3% month-on-month.  This is unlikely to push the FEDs hand to raise interest rates in April, as Janet Yellen mentioned in her comments last week that the FED will take a cautious but gradual hike in interest rates.

     



    ISM Manufacturing PMI figures cam out and showed that the manufacturing sector in the US is starting to pick up after 2015 we saw manufacturing decline and even go into contraction. It was a better than expected read of 51.8 from a forecast of 50.8 while the previous months read was 49.4. Lower oil prices have hit manufacturers tied to the energy industry, hurting domestic production, lowering demand for steel and drilling equipment, as well as other manufactured products used in the industry. The manufacturing recovery looks to be fragile; continued slowing of autosales and US Dollar strength may hinder the recovery in the manufacturing sector.

    Somehting interesting is happening on the AUD/USD daily chart. We saw back in January this year there was divergence between the RSI (Relative Strength Index) and Price. The RSI was showing strength in the AUD/USD and we saw the Aussie rally to 77c. Now we are seeing divergence once again and we may see the Aussie weaken. We have a higher high in price but the RSI is showing us weakness, lower highs. If weakness is coming back into the Aussie, we could see price retrace back down and test the 75c handle.


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