Odds Of December FOMC Rate Cut Fall Below 50%

Central Bank

Summary:

Traders continue to pare bets that the Federal Reserve will cut rates at its next meeting, with the odds now below 50%. The probability of a rate cut at the Fed's December 10th meeting is now 47.4%, down from 62.8% last week and 96% last month.

This sharp decline is partly due to the recent U.S. government shutdown, which has limited the availability of economic data. As a result, Federal Reserve officials feel they are "flying blind." Additionally, inflation remains somewhat elevated.

Susan Collins, a voting member of the Federal Open Market Committee (FOMC) and considered a centrist, expressed caution about further rate cuts given the lack of data. "Absent evidence of a notable labor market deterioration, I would be hesitant to ease policy further, especially given the limited information on inflation due to the government shutdown," Collins said in prepared remarks on Wednesday.

The Fed has cut rates at its last two meetings, bringing the federal funds rate down to 3.75–4%. However, Fed Chair Jerome Powell emphasized that a rate cut in December is "not a foregone conclusion, far from it."

With about four weeks remaining until the next FOMC meeting and a series of key economic reports now scheduled for release, market expectations could shift quickly. For now, however, traders are taking a more cautious approach about the possibility of a year-end rate cut.

Source: Yahoo Finance

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Adam

Stocks

Fundamental Overview

The hawkish repricing triggered by Fed Chair Powell’s uncertainty on a December cut coupled with the intensifying overnight funding pressure due to prolonged government shutdown weighed on the stock market in the last week.

The market bounced strongly on the expectations of the end of the shutdown on Friday and extended the gains this week as the expectations grew stronger. The S&P 500 has now basically erased all the losses experienced last week.

Looking ahead, the end of the shutdown will finally bring back the key US data like the NFP and CPI, and those are going to be key risk events for the market ahead of the FOMC decision in December. As a reminder, there’s a strong debate within the FOMC whether a December cut is warranted at this point. The data will have the final say.

Strong data is likely to weigh on the market on a further hawkish repricing, while soft data should give the market a boost as rate cut bets would increase.

S&P 500 Technical Analysis – Daily Timeframe

S&P 500 daily

On the daily chart, we can see that the S&P 500 bounced right at the major trendline and extended the gains this week as the end of the shutdown drew near. The target for the buyers is of course a new all-time high but we can expect the sellers to step in around the all-time highs with a defined risk above to position for a drop back into the major trendline.

S&P 500 Technical Analysis – 4 hour Timeframe

S&P 500 4 hour

On the 4 hour chart, we can see that the bullish momentum eased recently as the price action became more rangebound. We have the most recent swing low around the 6,830 level and that’s where we can expect the buyers to step in with a defined risk below the level to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking lower to pile in for a drop back into the major trendline.

S&P 500 Technical Analysis – 1 hour Timeframe

S&P 500 1 hour

On the 1 hour chart, there’s not much else we can add here but if we don’t get a pullback into the swing low, we can expect the buyers to increase the bullish bets on the break above the recent high at 6,900. The red lines define the average daily range for today.

Source: investinglive

Risk Warnings and Disclaimers

Add to Favorites

Samantha Luan

Stocks

Economic

A panel of U.S. appeals court judges on Wednesday voiced concerns that the National Labor Relations Board has gone too far in policing employers' restrictions on workers wearing union apparel, grappling with the issue in a case involving Starbucks.

Starbucks is challenging an NLRB ruling that said the company violated federal labor law by barring workers at a flagship New York City store from wearing t-shirts or more than one pin supporting a union campaign.

The case at the 2nd Circuit U.S. Court of Appeals in New York is the latest to ask a federal appeals court to rein in the NLRB's test for determining when workplace dress codes unlawfully interfere with employees' rights to advocate for better working conditions and join unions.

The 8th Circuit in St. Louis last week said Home Depot had the right to bar employees from writing "Black Lives Matter" on their work aprons, and the New Orleans-based 5th Circuit in 2023 said Tesla could bar factory workers from wearing union t-shirts. Both courts reversed NLRB decisions.

In the Starbucks case, a lawyer for the NLRB, Jared Cantor, told a three-judge 2nd Circuit panel on Wednesday that the board deemed any policy prohibiting union paraphernalia to be unlawful unless an employer can prove that "special circumstances" exist to justify restrictions.

Circuit Judges William Nardini and Susan Carney were skeptical of that standard, saying it rendered many common workplace dress codes illegal and failed to properly balance employers' legitimate interests, such as safety or their public image, with workers' rights.

Starbucks imposed its dress code "in accordance with a general desire to create a vibe for this retail establishment," said Carney, an appointee of Democratic former President Barack Obama. "Seems to me a reasonable position."

The 23,000-square-foot Starbucks store in Manhattan's Meatpacking District includes an on-site roastery, coffee and cocktail bars, a bakery and retail space.

Instead of Starbucks' standard green aprons and black tops, workers there don brown aprons and collared shirts or turtlenecks in muted colors and can opt to wear a handful of pre-approved shirts and pins. Those support various causes such as military veterans, Black Lives Matter, Hispanic Heritage Month and World AIDS Day, according to court filings.

The store in 2022 became one of the first Starbucks locations to unionize; workers at 650 other U.S. stores have voted to join unions since then, and in the process have filed hundreds of complaints with the NLRB accusing the company of illegal labor practices.

The board last year ruled that before the Manhattan store unionized, Starbucks interfered with workers' rights there by prohibiting union shirts and multiple pins, and that the company failed to show any legitimate justification. The company appealed to the 2nd Circuit.

Starbucks' lawyer, Amy Saharia, told the court on Wednesday that the board had made it so difficult for an employer to prove a special circumstance that even a policy allowing workers to wear a union pin was deemed illegal. But even under that test, Starbucks' policy was justified by its need to curate its public image and was evenly applied, she said.

Nardini seemed to agree with Saharia about the scope of the board's standard, questioning Cantor about its limits.

"Do [workers] have a right to wear union hats? And giant blinking signs, sandwich boards that say 'hooray for the union?'" asked Nardini, an appointee of Republican President Donald Trump.

"In a workplace where employees are wearing lots of sandwich boards, it's possible an employee could [have the right to] wear that one," Cantor replied.

The panel includes Circuit Judge John Walker, who was appointed by Republican former President George H.W. Bush.

The 2nd Circuit in 2012 upheld a Starbucks policy allowing baristas at smaller Starbucks stores to wear only one union pin, reversing a different NLRB decision. The court at the time said multiple buttons or pins could be distracting and interfere with the public image Starbucks intended to display.

Source: TradingView

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Adam

Economic

The flurry of records continued yesterday on global stock markets, which almost all closed higher. France's CAC 40 reached a new all-time high, crossing the 8,280-point mark for the first time during the session. The extra boost came from banking stocks, which regained their crown as the best sector of the year on the continent after stalling in September and October.

While Europe is shining thanks to banking and industry, in the absence of a technology sector worthy of the name on the stock market, Wall Street has relied more on companies closely or remotely linked to artificial intelligence to rebound after the slump in early spring. But that may be changing. In any case, this is a trend that has been circulating for the past few sessions, resulting in a fourth day of decline out of five for the Nasdaq 100. It was a slight decline (-0.06%), but a decline nonetheless, while the old Dow Jones broke its previous day's record by gaining 0.7%.

A company like Microsoft has posted a decline of more than 3% in three months, while the market has gained just over 6%. This 10% underperformance shows that the company has not been entirely convincing on AI, due to lavish capital expenditure. It's not a disaster either, because the share price is still up 20% over a year, but it shows that investors have started to secure their opulent gains on the AI theme. Meta Platforms is perhaps even more symptomatic. The share price is now only up 4% over the year, after falling 23% in three months. Meta initially caused concern due to a certain delay in AI, then its boss Mark Zuckerberg began recruiting across the board and investing tens of billions of dollars. A bit like when he became passionate about the Metaverse. But this time, he rode the main wave, which allowed the stock to triple in 2023 before gaining another 65% in 2024. Since then, things have been less fun, and Meta's AI dream team, recruited from the competition at great expense, has found itself facing what looks like a good old-fashioned redundancy plan. The company's leading AI guru (not Mark Zuckerberg, but Yann LeCun) is even on his way out.

The question now is whether profit-taking will lead to a more pronounced market rotation in favour of undervalued sectors. This has been something of a recurring theme on the stock market over the last decade: will investors abandon the expensive tech stocks that have been inflating their portfolios since 2009 and return to boring companies? There have been 50 such phases in recent years. Most of them came to nothing. A few have led to temporary outperformance by stocks that reasonable people call ‘value’ and others call boring. The most notable episode was in 2022, when the Nasdaq lost a third of its value while the archetype of old-fashioned investing, Warren Buffett's conglomerate Berkshire Hathaway, gained 4%. At MarketScreener, we have an in-house indicator to track these rotations, the Berkark index. In fact, the index is simply a comparison between the performance of the Ark Innovation ETF, run by the high priestess of risky investment Cathie Wood, and the performance of Berkshire Hathaway shares, run by Warren Buffett. Since the beginning of October, this indicator shows that Berkshire has gained 5.5% while Ark Innovation has lost 5%. This is a signal to watch, as it marks a turning point since the beginning of the year, when the queen was beating the king hands down (42% increase vs. 11%). For the more curious among you, I would point out that since 1 January 2022, i.e. taking into account both the plunge in technology stocks and the AI boom, Berkshire Hathaway has risen by 70% excluding dividends and the Nasdaq 100 by 55%. Ark Innovation is down 13%. This just goes to show that you still need to keep an eye on boring stocks.

Today's news is dominated by Donald Trump's signing of the end of the shutdown, following the House of Representatives' vote in favour. The affected federal agencies will now begin to restart operations. However, they will not be ready to publish October's inflation figures today, as the announcement has been postponed. On the monetary front, Kevin Hassett, director of the US Council of Economic Advisers, has officially declared himself a candidate to succeed Jerome Powell as head of the Fed. To strengthen his candidacy, he immediately announced that he was in favour of a large rate cut in December. Here is someone who knows the arguments that move the boss.

In Asia-Pacific, the picture is mixed this morning. Japan, mainland China, India and South Korea are up slightly. The Hang Seng is stable in Hong Kong, while Taiwan and Australia are losing some ground. Leading indicators are bullish in Europe and the United States after the official end of the budget impasse in Washington.

Source: marketscreener

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Olivia Brooks

Economic

Bond

U.S. 10-year Treasury yields, assuming no upside inflation surprises, are likely to rise modestly in coming months, according to a Reuters poll of market experts, while short-dated yields are forecast to decline on rate cut bets.

The survey results suggest inertia in the world's largest debt market despite a long list of potential risks, not least of which is a mountain of upcoming supply.U.S. President Donald Trump's recently passed budget will require an estimated $3 trillion of additional borrowing over the coming decade but that flood of expected issuance has yet to make any significant impact on current pricing.

The benchmark 10-year Treasury yield, currently 4.09%, was forecast to trade at 4.10% in the coming three and six months, before rising to 4.21% in a year, according to median forecasts from over 50 bond strategists surveyed from November 6 to 13. Medians were broadly unchanged from last month's survey.

Other market pricing, including multiple breakeven rates embedded in inflation-protected Treasury securities, points to lower market-based inflation expectations compared with earlier in the year.

That has coincided with the absence of official government data during the longest shutdown in history that just ended on Wednesday and still no serious official inflation evidence from U.S. tariffs on imported goods put in place this year.

Jean Boivin, head of the BlackRock Investment Institute, said this reflects a familiar pattern: bond markets are often excessively responsive to near-term developments.

"The implication is it's very likely the market is over-indexing on the recent track of inflation. And I don't think you make a good return by positioning in the near-term for what the market will only eventually price in properly. But I do think eventually the market will start to reflect more inflation expectations."

Indeed, the Federal Reserve's preferred inflation gauge is running at nearly 3% and has been above the 2% target for over four years. U.S. consumer inflation expectations have also remained elevated through most of the year.

Boston Fed President Susan Collins said on Wednesday persistent inflation warrants greater caution about the path of future easing, particularly for the upcoming December 17-18 Fed meeting.

According to the poll, the rate-sensitive two-year Treasury yield, currently 3.58%, was forecast to fall to 3.50% in three months and 3.40% in six months.Interest rate futures remain priced for three-to-four rate reductions by end-2026 despite stark divisions on the Federal Open Market Committee on how soon rates need to fall again.

Over three-quarters of respondents to an additional question, 26 of 34, said the yield curve would modestly steepen by end-January.

That included Michael Chang, head of rates derivatives strategy at Citi, who said the market was still bracing for higher "term premium" - compensation demanded for holding debt over time - as Treasury issuance continues to rise.

"We're expecting most of the coupon issuance increase to be announced in next year's November refunding meeting...And regardless of where the increase happens on the curve, that's going to translate to repricing for a higher term premium overall."

"That means the curve is probably going to be steeper, with the long end underperforming the front and the belly of the curve," Chang added.

Source: Kitco

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Adam

Economic

The 43-day government shutdown ends today, but the market relief rally could be short-lived. Here’s the trade nobody’s talking about.

What Wall Street Is Missing

Markets are rallying on the shutdown’s end, but sophisticated investors should be positioning for what comes next: a Fed that’s been flying blind for six weeks and may now pause its rate-cutting cycle just as markets priced in certainty.

Fed Chair Jerome Powell already warned in late October that "a further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it." Translation: The data blackout from the shutdown has made the Fed uncomfortable enough to potentially skip December’s cut.

Market odds for a December rate cut have already dropped to 67% from 92% just a month ago. The VIX closed at 17.60 on November 11, suggesting markets are pricing in relative calm, but that complacency may be premature as delayed economic data starts trickling out and Fed uncertainty mounts.

This matters more than the shutdown itself.

The Data Black Hole That Changes Everything

October’s CPI and jobs reports are unlikely to be released, leaving a permanent gap in the Fed’s decision-making data. Powell said, "What do you do if you’re driving in the fog? You slow down," when asked about the missing data affecting December’s meeting.

The shutdown has created what market participants are calling an "unprecedented data vacuum." The cascading effect has created a backlog of information, leaving policymakers and market participants without a clear picture of the economy’s recent performance.

The Fed’s Problem: In its September meeting, the FOMC indicated expectations for 75 basis points of rate cuts by year-end. The vast majority of survey respondents expected at least two 25 basis point cuts by year-end, with around half expecting three cuts over that time. Six weeks of missing data has since made the Fed’s framework (which relies on comprehensive economic indicators) severely compromised.

St. Louis Fed President Alberto Musalem recently signaled growing hawkish sentiment, stating, "there’s limited room for further reductions without monetary policy becoming overly accommodative." This represents a significant shift from the September optimism.

The tactical trade: Rate-sensitive sectors that rallied on expectations of December cuts (REITs, utilities, high-growth tech) are vulnerable to a sharp reversal if the Fed signals a pause. 10-year Treasury yields have fallen about 40 basis points to 4.0% and 2-year Treasury yields declined to around 3.5% since the Fed resumed rate cuts in September, but these moves could reverse quickly.

Treasury Market Dynamics Tell a Different Story

Equity markets rallied on the shutdown’s near-end, but the Treasury market has been sending warning signals. In October, short-term interest rates showed signs of upward pressure, with the Tri-party General Collateral Rate (TGCR) increasing to 13 basis points above interest on reserve balances (IORB) on October 28.

The repo market (the plumbing of the financial system) has been showing stress. The increase in repo rates over the period was driven by the increase in net Treasury bill issuance amid the rebuilding of the Treasury General Account following the debt ceiling resolution, continued large Treasury coupon issuance, and ongoing reductions in the Federal Reserve’s balance sheet.

What this means for traders: When the government reopens and begins processing the massive backlog of payments, there will be a sudden surge in government disbursements that could create unusual volatility in overnight funding markets. Watch the 3-month Treasury repo rate for tactical opportunities.

The $11 Billion Permanent Loss Nobody’s Pricing In

Avoid the "quick recovery" narrative. The Congressional Budget Office projected that about $11 billion in economic activity will be permanently lost from this shutdown. Some canceled flights won’t be retaken, missed restaurant meals won’t be made up, and some postponed purchases will end up not happening at all. This hits Q4 GDP growth directly.

The reopening should boost first-quarter growth next year by 2.2 percentage points, creating a classic setup for Q1 2026 outperformance after Q4 2025 weakness.

The consumer spending dimension: Federal workers will have missed about $16 billion in wages by mid-November. Even with back pay coming, payments won’t be complete until November 19 at the earliest, hitting critical holiday shopping weeks. This creates a mid-November to early December spending gap that won’t be fully recovered.

The Washington, D.C. area (where the unemployment rate was already 6% before the shutdown) will see compounded economic stress through the holiday season.

The Contractor Payment Crisis Is Real (And Measurable)

The speculative "contractor financing crisis" theory from your original research was overblown, but there is a genuine, measurable impact worth watching.

A small business owed $20 million in outstanding invoices would be owed about $74,000 in interest as of November 10 under the Prompt Payment Act, with the Treasury Department setting the interest rate for calendar year 2025 at 4.625%. This is the "tip of the Prompt Payment Interest iceberg that agencies will face when they reopen."

More critically, agencies will face a backlog of invoices when they return to the office, and a lot of agencies may have to figure out how to calculate and pay the interest because it’s been so long since they’ve had to do it.

For larger contractors: Defense and aerospace giants like Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), and Raytheon faced uncertainty due to stalled payments, delayed contract awards, and stop-work orders. Major defense firms might be somewhat insulated, but smaller and mid-sized contractors often lack the financial buffers of their larger counterparts, and the significant cash flow disruptions and potential workforce losses incurred during the 39-41 day shutdown could take time to fully overcome.

Watch defense contractor stocks for Q4 earnings guidance adjustments.

Three Actionable Trades for the Next 30 Days

December Fed Rate Cut Probability Has Collapsed: From 92% Certainty to 67% Uncertainty

Fade the Rate-Sensitive Rally (High Conviction)

The Setup: December rate cut odds have dropped from 92% to 67%, but rate-sensitive sectors haven’t fully repriced this shift. Nominal Treasury yields fell 20 to 40 basis points over the September intermeeting period, with the largest decline occurring at the short end of the yield curve, but this move could reverse.

The Trade: Consider tactical shorts or put spreads in:

Utility Select Sector SPDR (NYSE:XLU) - Most rate-sensitive sector

Real Estate Select Sector SPDR (NYSE:XLRE - REITs particularly vulnerable

iShares Russell 2000 (NYSE:IWM) - Small caps most exposed to higher-for-longer rates

Timing: Position ahead of the December 9-10 FOMC meeting. Close or take profits if Powell signals confidence in December cut.

Risk Management: Set stops at recent highs. If the Fed surprises dovish, these sectors could rally hard. Size accordingly.

Shutdown’s Market Impact: Why December Rate Cuts Just Collapsed From 92% to 67%_2

Rate-Sensitive Sectors Face Sharp Downside If December Fed Cut Is Skipped

Long Volatility Into December FOMC (Medium Conviction)

The Setup: The VIX at 17.51 (as of November 13) suggests market complacency. The CBOE Volatility Index (VIX) spiked initially during the shutdown, but has since settled back to moderate levels despite unprecedented Fed uncertainty.

Historically, the VIX averages about 20 but spikes much higher during periods of extreme uncertainty. Current levels around 18 underestimate the potential for Fed-induced volatility.

The Trade:

December S&P 500 (SPX) straddles - Profit from movement in either direction

VIX calls with December 20 expiry - Positioned for FOMC meeting volatility

Monitor Treasury yield volatility - The MOVE index (Treasury market volatility) for confirmation

Why It Works: The market is underpricing Fed policy uncertainty combined with delayed economic data releases that could surprise in either direction. When September and October reports finally emerge, they could move markets significantly.

Entry: Build positions over the next week as VIX remains subdued. Don’t wait until the week before FOMC.

Position for Q1 2026 Growth Rebound (High Conviction, Longer Timeline)

The Setup: The reopening should boost first-quarter growth next year by 2.2 percentage points as back pay flows through, government spending normalizes, and delayed projects resume. Real GDP grew 1.6% annualized in the first half of 2025, down from 2.6% in the second half of 2024. The Q1 2026 bounce could reverse this slowdown.

The Trade: Build positions in:

Defense Contractors: Firms like Leidos, Booz Allen Hamilton, and Palantir Technologies with substantial federal contracts will see operations normalized and delayed payments released, improving their cash flow and revenue. Buy weakness in late December.

Cyclical Sectors: Industrials (XLI) and materials (XLB) for economic reacceleration. Infrastructure spending continues through 2027.

Regional Banks in Federal-Worker Heavy Areas: First Republic-style banks serving Maryland and Virginia will benefit from wage catch-up and normalized spending patterns.

Timing: Don’t rush. Start accumulating on weakness in late December. Position for January earnings season bounce. These are 3-6 month holds, not day trades.

Catalyst: Back pay distribution complete by late November, Q4 GDP disappointment priced in by year-end, Q1 2026 data starts showing acceleration.

What To Watch Next Week

Back Pay Distribution Timeline

: Different agencies have projected payment dates ranging from November 15 to November 19. If payments are delayed beyond November 19, consumer spending weakness extends through more of the holiday season. This would amplify Q4 GDP weakness.

Fed Speaker Commentary

: Critical two weeks ahead. Watch for Fed officials’ speeches for clues on December decision. Pay special attention to any references to "data-dependent" being a two-way street. That could signal a pause.

Delayed Data Releases

: When September and October economic reports finally emerge, they’ll move markets. The backlog of crucial economic data, including inflation and employment reports, could significantly influence market sentiment and the Federal Reserve’s stance on interest rates. Prepare for volatility when these drop.

Prompt Payment Act Interest Claims

: Contractors need to be prepared to claim interest when the government reopens, with many agencies having to figure out how to calculate and pay the interest because it’s been so long since they’ve had to do it. This represents an unquantified government expense that could affect fiscal projections.

Contractor Invoice Backlog Processing

: Agencies will face a backlog of invoices when they return to the office, and processing delays could extend payment timelines by 30-60 days beyond normal. Watch for early signals from the Defense Department and VA on payment processing speeds.

The Volatility Opportunity Most Are Ignoring

There’s a sophisticated angle worth considering: The VIX-Treasury relationship is out of sync. Equity volatility has subsided to 17-18, but three-month expiry options on ten-year interest rate swaps now imply 72 basis points of annualized volatility, the lowest level since 2021.

This asymmetry suggests the bond market is too calm given the Fed’s data uncertainty. A tactical play: Long VIX calls paired with positions in Treasury volatility (via TLT options) creates a correlated volatility basket that’s currently mispriced.

The technical setup: If December FOMC disappoints (pause or hawkish language), both equity and Treasury volatility should spike together. Current pricing assumes only one moves while the other stays calm. Historically unlikely during Fed surprises.

In Summary

Markets expect the shutdown to end and everything to normalize. The reality is more nuanced: a Fed that’s lost confidence from missing data, permanent economic losses that hit Q4 GDP, a consumer spending crunch through early December, and a contractor payment backlog that extends well into 2026.

Instead of rallying on the shutdown’s end, the smart trade positions for:

Fed pause risk (December FOMC disappointment)

Q4 GDP weakness (extended through November spending data)

Q1 2026 rebound setup (government spending normalization + back pay effects)

Volatility mispricing (VIX and MOVE both too low given uncertainty)

Risk appetite levels:

High conviction: Fed pause risk, Q1 rebound setup

Medium conviction: Q4 weakness extending, volatility opportunity

Lower conviction: Systemic contractor financing crisis (possible but not measurable yet)

The relief rally from the shutdown’s end may last days. The repositioning for Fed uncertainty will drive the next six weeks of market action. And the Q1 2026 rebound trade could be the best setup of early next year if you position before everyone else sees it coming.

Source: investing

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Adam

Forex

While waiting for federal employees to return to work, investors have turned to the private sector to get the best possible estimate of the state of the US economy. The ADP employment survey reported 42,000 net jobs created in October, compared with 30,000 expected, a sign that the labor market is stabilizing. At the same time, the services PMI index remains in expansionary territory at 54.8, although slightly below expectations, while the ISM services index came in at 52.40, against an anticipated 50.80. A similar trend can be seen in Europe (eurozone and the UK) and Asia, which has had the effect of supporting bond yields, indirectly favoring the dollar.

Technically, the dollar index is at a crossroads. It is currently testing the neckline of a potential double bottom reversal pattern. A break above 100.25 should pave the way for a continuation of the rebound that has been underway since mid-September towards 104.00/85. It should be noted that the RSI has moved out of its oversold zone and is pointing to an uptrend.

At the same time, the EUR/USD is still holding above 1.1500/1480, a critical level for confirming a significant decline towards 1.1065/50. The USD/JPY is stabilizing after hitting 154.15/50, while the USD/CHF has approached a resistance zone at 0.8130/55. In other words, if you want to bet on a decline in the dollar, this pair seems to be the ideal investment vehicle.

On the commodity currency side, the USD/CAD almost hit its target at 1.4150 before retreating, while the Aussie came back to test its support at 0.6440 for a new rebound. Only the kiwi remains negatively oriented: we will avoid getting in the way of the train that should take it towards 0.5505/5485.