The US job opening numbers for August exceeded expectations, leading to a negative session on Wall Street. The strong labor market suggests that the Federal Reserve may keep interest rates high for a longer period. US Treasury yields continued to rise, with the 10-year yields reaching 4.8%. The VIX, which measures market volatility, is also at a four-month high.
In the upcoming sessions, market participants will be watching the US Automatic Data Processing (ADP) private payrolls data and US services purchasing managers index (PMI). There is potential for a softer read on both fronts, which could give US policymakers some breathing room when it comes to tightening. The ADP data is expected to moderate while the US services PMI is expected to soften.
Silver prices have been affected by higher Treasury yields and a strong US dollar. However, there is a possibility for short-term relief as prices attempt to hold around the $20.75 level. If there is a move above yesterday’s close, it may provide greater conviction for the relief rally. On the downside, if the $20.75 level is not defended, prices may fall towards the $19.80 level.
In Asian markets, stocks are expected to open on a downbeat note. The Nikkei, ASX, and KOSPI are all indicating losses. The Reserve Bank of New Zealand (RBNZ) has decided to keep rates on hold as expected. This has led to a dip in the NZD/USD to its three-week low. The RBNZ’s guidance suggests that inflation is expected to decline and they are leaning towards a wait-and-see approach when it comes to further rate hikes.
There was a suspected intervention by Japanese authorities for the USD/JPY at the key psychological level of 150.00. However, dip buyers quickly halted the weakness and the pair remains near its 11-month high. Buyers may attempt to retest the 150.00 level, and any failure for authorities to provide a more aggressive signal could challenge their credibility. On the downside, immediate support is expected at the 147.30 level.
