The Aftermath of the Ishiba Shock: Market Focus Shifts to U.S. Employment Data
The Aftermath of the Ishiba Shock: Market Focus Shifts to U.S. Employment Data
Currently, the yen is showing a gradual depreciation. The yen's appreciation that occurred from last weekend into the beginning of the week has settled, and the so-called "Ishiba Shock" seems to have run its course. Additionally, uncertainties surrounding the Chinese economy are gradually being alleviated by the government's successive economic stimulus measures, leading to significant gains in both Shanghai and Hong Kong stocks. China is entering the upcoming long holiday with an optimistic outlook.
On the other hand, views on national policy interest rates are stabilizing, with expectations for additional rate hikes by the Bank of Japan and significant rate cuts by the U.S. FOMC receding. This has led to a respite in recent market volatility, and attention is expected to shift back to fundamentals moving forward.
Key Focus This Week: U.S. Employment Data and Labor Market
This Friday, the highly anticipated U.S. employment data will be released. Fed Chair Powell has suggested that he is increasingly focusing on the labor market as one of the two main themes, alongside inflation, indicating that the strength of employment could influence the pace of future rate cuts.
Today, the U.S. will release data on the manufacturing PMI (September), construction spending (August), JOLTS job openings (August), and ISM manufacturing index (September). Of particular interest is the JOLTS job openings data, with a median forecast of 7.673 million for August, which is consistent with July's figures. However, given the wide range of predictions (7.5 million to 8 million), market reactions could be sensitive. The ISM manufacturing index is expected to slightly increase from 47.2 to 47.5.
Speaking Events
Scheduled speaking events today include:
- De Guindos, ECB Vice President
- Nagel, President of the German Bundesbank
- Pill, Chief Economist of the Bank of England
In the evening, speakers will include Bostic, President of the Atlanta Fed; Cook, Fed Governor; Schnabel, ECB Executive Board Member; Collins, President of the Boston Fed; and Barkin, President of the Richmond Fed. Additionally, the inauguration speech of the new Swiss National Bank Governor, Schlegel, is also scheduled.
Trading Strategy
While the USD/JPY has rebounded significantly, there is a substantial amount of options accumulated at the 144.35-50 level, which is expected to act as resistance. Today's key events include the U.S. JOLTS job openings and ISM manufacturing index, both to be announced at 23:00. Given the potential for significant movement in the U.S. dollar following these indicators, I plan to trade in line with the market trend.
