Bonds Yields down to 1.51%, ADP beat the estimates
US ADP Non-Farm Employment Change report shows that the private sector of the economy added 568K new jobs in September, and beat the 425,000 expected new jobs. This data with tomorrow's Jobless claims and Friday's NFP numbers will be the most important data to watch before the FOMC Meeting of November 2-3, 2021. Positive employment data, after good improvement in the Manufacturing and Service PMI numbers, will be enough to keep the Fed on course to begin tapering before year-end.
While the latest published economic data shows that US inflation is increasing and as Mrs. Yellen says it will be still high for the next seven months, the NFP report is seen as key data to define the Fed’s tone and timing for tapering and even rate hikes, especially if the figures wildly impress or disappoint the market expectations. If data beat the expectations especially with very impressive numbers, will lead the FED to start the Hawkish policies faster, jump in the US Dollar rate and free-fall in the Gold price. On the flip side, missing the data will put the FED a bit on the Hold, as the labor market is the priority to determine the future monetary policies for Federal Reserve.
Besides Friday’s NFP numbers, gold traders are also watching closely the US Treasury yields and the US Dollar. US 10-year Treasury Yield tested above 1.55% before to ease to 1.51% after ADP numbers.
Increasing US Bond Yields on Tuesday and early Wednesday after positive economic data, added optimism about the economic recovery. The Institute for Supply Management’s services purchasing managers’ index (ISM PMI) in September shows the increase to 61.9 from 61.7 of August.
From the technical point of view also, we can see this uncertainty. Gold has a slight downtrend, just a bit under 20 & 50 Day moving averages. Main Resistance currently sits at 1788, and an uptrend, in the beginning, needs to pass this level.
