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Good morning: Alpha Trade

US data weakened further, and the US dollar fell steadily against G10 currencies again, as did gold. With gold prices reaching a 13-month high, the US dollar against gold is currently in a unilateral downward trend.

The weaker-than-expected JOLTS data and the decline in job vacancies to the lowest level since May 2021 have panicked the market, and dovish interest rate bets have been digested, with the market expecting the Fed to either raise interest rates or pause at its next meeting.

The sharp decline in job vacancies has put pressure on stocks, and this tone remained when European markets opened.

Also shocking the market was that the Reserve Bank of New Zealand announced a 50 basis point rate hike and said it would raise rates further to bring inflation back to target levels. The unexpected rate hike made the New Zealand dollar stand out among G10 currencies.

The background of New Zealand's rate hike is that the New Zealand economy is heading for recession, and housing data released during the session also showed that house prices fell 10% year-on-year, the largest drop on record, making the decision of the Reserve Bank of New Zealand even more difficult to understand.

Asia-Pacific stocks were mixed, with the NZX50 giving up gains after New Zealand raised rates.

The dollar index was just above 101.50 and was trying to get back to 102. The euro was just above 1.0950 and the pound was just below 1.2500.

A number of US data are due to be released soon, including ADP data, international trade data and the ISM services PMI. The data will be closely watched, and market makers want to study the data to predict the path of US rate hikes.

Regarding the ADP private sector employment data, the market expects the US to add 200,000 jobs in March, compared with 242,000 in February.

Meanwhile, the much-watched ISM services PMI is expected to fall to 54.5 in March from 55.1 in February, and the ISM employment index, prices paid index and new orders index will also fall compared with previous months.

There is no doubt that the disappointing data will cause the US dollar to fall, and the New Zealand dollar and gold will be the main beneficiaries.

Alpha Trade

The current price of gold is $2,023, mainly due to the weaker-than-expected JOLTS data yesterday. Gold traders will now be keeping a close eye on the $2030-2035 area above, which if breached (perhaps due to weak data in the afternoon) could test the all-time high of $2070.

Currently $2000-2010 is seen as support, having previously been resistance.

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