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This Week: USD set to react to US jobs report

Huge monetary tightening, currency interventions, crisis management QE, war, energy shocks and systemic risk have all been some of the market drivers in last few weeks of the third quarter.

It seems many of these will continue into the final quarter of the year, as central banks continue to fight sticky and elevated inflation.

In this first week of Q4, here are the major scheduled events and data releases that may move markets:

Monday, October 3

  • Mainland Chinese markets closed this week
  • JPY: Japan 3Q Tankan
  • EUR: Eurozone September manufacturing PMI (final)
  • GBP: UK September manufacturing PMI (final)
  • USD: US September ISM manufacturing and manufacturing PMI (final)
  • USD: Speeches by Atlanta Fed President Raphael Bostic, New York Fed President John Williams


Tuesday, October 4

  • JPY: Tokyo September CPI
  • AUD: Reserve Bank of Australia rate decision
  • EUR: Eurozone August PPI
  • USD: Speeches by New York Fed President John Williams, Dallas Fed President Lorie Logan, Cleveland Fed President Loretta Mester, and San Francisco Fed President Mary Daly


Wednesday, October 5

  • NZD: Reserve Bank of New Zealand rate decision
  • EUR: Eurozone September services PMI (final)
  • Brent: OPEC+ meeting
  • US crude: EIA weekly oil inventory report
  • USD: Speech by Atlanta Fed President Raphael Bostic


Thursday, October 6

  • AUD: Australia August external trade
  • EUR: Eurozone August retail sales, Germany August factory orders
  • USD: US weekly initial jobless claims
  • USD: Speeches by Chicago Fed President Charles Evans, Fed Governor Lisa Cook, Cleveland Fed President Loretta Mester


Friday, October 7

  • EUR: Germany August retail sales, industrial production
  • GBP: Speech by BOE Deputy Governor Dave Ramsden
  • CAD: Canada September unemployment
  • USD: US September nonfarm payrolls, speech by New York Fed President John Williams

 

 

We get the first Friday of the month so that means the latest release of the US non-farm payrolls report.

The consensus expects a headline print of 250k payroll gains.  This comes after a fifth straight beat in August and a reading of 315k that was over double the 2019 average. The unemployment rate is forecast to remain at 3.7% which is likely to support hourly wage growth at 0.3%.

Analysts say further robust job gains may become more limited, especially if the participation rate remains subdued. But there are few signs as yet of any major weakness in the labour market when looking at the more frequent weekly initial jobless claims number and high vacancies.

This is the last jobs data before the Fed meeting right at the start of the next month.

The chance of another 75bp Fed rate rise next month is currently given a 64% by Fed funds futures.

Any notable cooling down in the US jobs market portends to easing dollar strength, though the case for more Fed rate hikes should remain.

Plus, the safe haven bid for the greenback is never far away in the current environment.

USD set to react to US jobs report

 

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