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AUDUSD an interesting pair that looked heavy on the cycle lows  A strong US jobs report and earnings, together with higher US yields and a CPI release that doesn’t move the needle this week are likely needed to prompt a new slide, perhaps eyeing the 0.6000 area eventually. Clearly weak jobs growth, indifferent or worse average hourly earnings, and a weaker than expected US CPI next Thursday, together with a celebratory surge in risk sentiment as treasury yields presumably drop. Remember that the RBA pivoted dovish and concerns remain on demand from China, where new Covid cases remain a threat as the cold season approaches in norther regions ahead of the pageantry of appointing leader Xi to a third term. 

AUDUSD W1 10 10 2022 1231


For the moment, the Fed tightening rhetoric appears to be unmovable, meaning supposedly that we’ll have to look through many months of softening employment data before we can expect the Fed to climb down from its hawkish freight train. In that light, today’s September jobs data may weigh little, barring huge surprises.

As for the Fed, speeches from no fewer than three FOMC voters suggest that all Fed members are on the same page in continuing to deliver a message of determination to see the inflation dragon slain before easing up.

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