This week, following announcements like the FOMC and the US quarterly Treasury bond auction plan, US bond yields have decreased. Dollar selling has expanded in the latter part of the week. However, when looking at the overall picture of the US Dollar Index for October, it has not broken free from the range between the 105s and the mid-107s. The strong upward trend in the dollar from July to early October has paused, and trading is taking place in the upper range.
Against this backdrop, today’s release of the US employment data is of significance. Given the influence of a robust labor market and persistent wage growth on expectations of higher US long-term interest rates, the content of this report is keenly awaited. The nonfarm payrolls figure is expected to show an increase of 180,000, which is lower than the previous gain of 336,000. The unemployment rate is expected to stay at 3.8%, matching the previous reading. Average hourly earnings are forecasted to rise by 0.3% month-on-month, slightly slower than the previous increase of 0.2%. However, the year-on-year figure is expected to decelerate to 4.0% from the previous 4.2%. While some calm is expected, the report is not anticipated to show significant weaknesses like job losses. At this stage, it is not expected to lead to a breakout towards dollar selling.
Canada is also releasing its employment data today. October’s employment gain is estimated to be around 25,000, showing a slowdown from the previous 63,800. The unemployment rate is projected to rise by 1 percentage point to 5.6% from the previous 5.5%. The labor force participation rate is expected to remain unchanged at 65.6%. A moderate stabilization of the labor market is anticipated, and there is no expectation of a change in the Bank of Canada’s policy rate stance.
In the upcoming London market session, Germany’s trade balance for September, Turkey’s consumer price index for October, Turkey’s producer price index for October, France’s industrial production index for September, the Eurozone’s unemployment rate for September, and the UK’s non-manufacturing PMI (final) for October will be released. In the New York market, aside from the US and Canadian employment data mentioned earlier, the US non-manufacturing PMI (final) for October and the US ISM non-manufacturing business activity index for October are scheduled for release.
Regarding speeches and events, remarks from high-ranking Bank of England officials, including Chief Economist Pill and MPC member Haskel, are scheduled. Haskel advocated for a minority rate hike in yesterday’s Bank of England policy meeting, so hawkish remarks can be expected. Among US central bank officials, appearances and speeches by Neel Kashkari, President of the Minneapolis Fed, and the Vice Chair of the Federal Reserve, are scheduled.
keep an eye on the USD’s price movement following the US employment data and the unemployment rate release. If it leans towards selling, consider following the trend.