Don Hemming: There Is A Rebound Demand Before The Dollar Rises.

Last Friday, the US's employment data, which was substantially better, made the market optimistic about the future economic prospects of the United States. The market expects that the time for the Federal Reserve to tighten monetary policy will be advanced from next September to the middle of next year.

Driven by strong employment data, the US dollar index has soared, breaking up nearly six years' high 89.467 level, and ending up 0.86%.

Other non US currencies were generally low, with the euro hitting the two-and-a-half lows against the dollar, ending 1.2290 in the New York stock market, or 0.7%, and the pound against the US dollar 1.5570, hitting 15 month lows; the US dollar against Japanese yen was 121.42, rising 1.37%, but it was the highest 121.68 in 2007.

After a week's overdue weekly market, the market will enter a relatively dull trading week this week.

From the distribution of events, the basic information that investors should pay attention to are mainly the quarterly meetings of the Bank of England financial policy committee, the speech of the European central bank governor Delaki, the New Zealand Federal Reserve and the Swiss central bank interest rate resolution, German inflation and trade accounts, US retail, initial jobless claims and consumer confidence index.

During this week, the strong non-farm payrolls data released last Friday will continue to ferment this week.

The US non farm report in November will become the watershed of the central bank's monetary policy path, and the US Federal Reserve will step into the interest rate increase channel, while Europe bank, Japan Bank and so on will be faced with a more relaxed choice because of the economy and inflation.

According to the data released by the US Department of labor, the number of non farm payrolls in the United States after the 11 quarter rose 321 thousand, far ahead of the expected 230 thousand, and the largest increase since January 2012, which is the tenth consecutive month of increase in the number of employed persons over 200 thousand.

In November, the unemployment rate in the United States was 5.8%, 5.8% and 5.8%.

In addition, payroll data from the market show that the average annual wage per hour in the US increased by 2.1% in November, an increase of 2%. The employment rate of the United States in November was 62.8%, and the former value was 62.8%.

After the release of the data, the market sentiment is optimistic, and the consensus is optimistic about the US economy, raising the anticipation of the US Federal Reserve raising interest rates ahead of schedule.

The employment market in the United States so far in 2014 has achieved the best performance in the past 15 years, and this non-agricultural data is the largest increase since January 2012.

This makes the difference in economic prospects between the United States and most other developed economies more obvious.

The market now expects the fed to tighten its monetary policy from September next year to the middle of next year.

According to the market performance, this support may continue. Dao Ming securities analysis pointed out that the US non farm employment report November is not only a seasonal problem, but the employment situation in December will be even stronger.

The agency expects the US Federal Reserve to discuss whether it will delete a "long time" statement in the interest rate forward-looking guidelines at the 16-17 day interest rate meeting in December, which means that FOMC will give the biggest hint on the first increase in interest rates.

In contrast, the euro zone economy is bleak. Although Germany's economic data released on Friday are better than expected, the German central bank has again lowered Germany's economic growth expectations.

The Bundesbank released its report on Friday to sharply reduce economic growth expectations in 2014, 2015 and 2016, with the target of GDP growth in 2015 being cut from 2% to 1%.

The report argues that the outlook for the German economy is rather grim, describing industrial output as "stagnation" and that business investment has not been growing effectively since the end of 2013.

In addition to Germany, economic growth has been downgraded.

The sovereign ratings of Italy, the third largest economy in the euro area, have been even downgraded.

Credit rating agency Standard & Poor's released a report Friday, reducing Italy's sovereign credit rating from BBB to BBB-.

The credit rating of Italy, the third largest economy in the euro area, has been adjusted to a level higher than the junk level. It is a new blow to reformist Italy Prime Minister Lenzi.

Lenzi, who took office in early 2014, has been pushing for reforms in Italy's labour laws, hoping to help reduce the unemployment rate at 12.6%.

S & P said in its report that Italy's economy is beset by factors such as high unemployment, declining demand from European neighbors and inadequate domestic consumption.

This week, Europe will be the focus of attention. Delaki will address twice, and the euro area will release a series of important economic data. Most importantly, the European Central Bank will announce the results of the refinancing operation this week. In the background of last week, European bank officials said that the bank was considering the launch of QE in January next year, so many events this week may decide whether the European bank will really push the QE in January. The euro will therefore face a very difficult Monday this week, but the demand for TLTRO in the banking industry is poor. The market may be more likely to speculate that the European Central Bank will intervene and take other tools.

This means that the ECB is likely to follow the steps of the US, Britain and Japan to start the sovereign debt purchase plan.

Eurozone and

The gap widened further.

The difference is also widening, which makes the euro generally pressure on the US dollar.

In the medium term trend, the further decline in exchange rate seems to have become a general consensus in the market.

On the basis of compliance with the market trend, how to grasp the trend of intervention in detail is the detail that some investors in the market need to pay attention to.

In other words, does the euro mean that the exchange rate will not slide back to our target 1.2?

before

An important factor in the fall in the US dollar is that the market believes that the European Central Bank will launch more stimulus plans soon.

But now, judging from his statement last Thursday, this is premature.

At present, the size of the euro's short positions is very large, and there is a demand for rebound adjustment.

On the other hand, US economic data continue to support us dollar, but this expected market has existed for a long time, and the long-term rise also makes us dollar demand adjustment.

In particular, as for this trading day, the US employment market index (LMCI) will be released in the US session, which has been inconsistent with non-agricultural data since the advent of the data.

We might as well have guessed that demand rebounded before the dollar rose again.

On the technical side, the support of the 200 level moving average of the monthly level map also answers our chances of intervening in the short run to the euro at the top 1.2230, and the target of the top callback is still near 1.24.