America’s roundup: Dollar weakens after data shows U.S. wage gains were modest, Wall street falls, Gold inches up, Oil prices Mark weekly gain ahead of Iran sanctions-october 6th, 2018
• US Sep Non-Farm Payrolls, 134k, 185k forecast, 201k previous, 270k revised.
• US Sep Private Payrolls, 121k, 180k forecast, 204k previous, 254k revised.
• US Sep Unemployment Rate, 3.7%, 3.8% forecast, 3.9% previous.
• US Sep Average Earnings m/m, 0.3%, 0.3% forecast, 0.4% previous, 0.3% revised.
• US Sep Average Earnings y/y, 2.8%, 2.8% forecast, 2.9% previous.
• US Aug International Trade $, -53.2B, -53.5B forecast, -50.1B previous, -50.0B revised.
• US Aug Goods Trade Balance (R), -75.46B, -75.83B previous.
• US Aug Consumer Credit, 20.08B, 15.00B forecast, 16.64B previous, 16.60B revised.
• Fed’s Williams sees ‘ways to go’ before rates pinch growth.
• Fed’s Bostic urges getting to neutral monetary policy stance.
• CA Sep Employment Change, 63.3k, 25.0k forecast, -51.6k previous.
• CA Sep Unemployment Rate, 5.9%, 5.9% forecast, 6.0% previous.
• CA Sep Full Time Employment Chng SA, -16.9k, 40.4k previous.
• CA Sep Part Time Employment Chng SA, 80.2k, -92.0k previous.
• CA Sep Participation Rate, 65.4%, 65.3% previous.
• CA Aug Trade Balance C$, 0.53B, -0.11B previous, -0.19B revised.
• CA Aug Exports C$, 50.55B, 51.27B previous, 51.11B revised.
• CA Aug Imports C$, 50.02B, 51.38B previous, 51.30B revised.
• Saudi Arabia’s Crown Prince Insisted Kingdom Is Fulfilling Promises To Make Up For Iranian Crude Supplies Lost To American Sanctions- Bloomberg.
• Sterling rallies as EU negotiators see Brexit divorce deal “very close”
• EU’s Juncker hopes for Brexit deal in November.
• Argentina peso gains as short-term interest rates climb.
• Analysts see more risks than hope in Italy budget plan.
Looking Ahead – Economic Data (GMT)
• 7 Oct N/A China Sep FX Reserves (Monthly), 3.105T f’cast, 3.110T previous
• 8 Oct 07:15 China Sep Caixin Services PMI, 51.5 previous
• 8 Oct 06:00 Australia Sep ANZ Internet & Newspaper Job, -0.6% previous
Looking Ahead – Events, Other Releases (GMT)
• Oct 8 16:00 ECB policy maker Ewald Nowotny, Austrian Finance Minister Hartwig Loeger and Erste Group Chief Executive Andreas Treichl participate in discussion about the future of the financial sector in Austria in Vienna, Austria.
EUR/USD is likely to find support at 1.1461 levels and currently trading at 1.1517 levels. The pair has made session high at 1.1549 and hit lows at 1.1496 levels. The euro strengthened against dollar on Friday after data for September showed jobs gains fell short of expectations while wages increases slowed on an annualized basis during the month, easing concerns about a large run-up in inflation. Nonfarm payrolls increased by 134,000 jobs last month, the fewest in a year, though data for July and August was revised to show 87,000 more jobs added than previously reported. Average hourly earnings increased eight cents, or 0.3 percent, in September after rising 0.3 percent in the prior month. With September’s increase below the 0.5 percent gain notched during the same period last year, that lowered the annual increase in wages to 2.8 percent from 2.9 percent in August, which was the biggest rise in more than nine years. Hawkish Fed speakers and strong U.S. economic growth have supported the greenback in recent weeks. A dramatic surge in Treasury yields this week that may attract investors seeking higher returns is also seen as positive for the U.S. currency. The dollar reversed direction several times before settling at lower levels after the data. The dollar index fell as low as 95.516, from around 95.770 before the data, before rising back to 95.678. The euro was up 0.02 percent to $1.1517.
GBP/USD is supported in the range of 1.3026 levels and currently trading at 1.3114 levels. It reached session high at 1.3121 and dropped to session low at 1.3060 levels. Sterling touched a two-month high against the dollar on Friday after the European Union’s Brexit negotiators said they believed a divorce deal with Britain was “very close. The pound rose on report, which cited two diplomatic sources who attended a meeting with a member of EU Brexit negotiator Michel Barnier’s team. After a summer sell-off fuelled by a spike in worries Britain would exit the EU disruptively without a trade deal in place, sterling has recovered as optimism grows that Brussels and London can overcome differences and reach an agreement. Crucial to any deal is resolving what to do about checks on the border that will separate Northern Ireland, part of the United Kingdom, and EU member state Ireland.EU sources said on Thursday that negotiators saw the outline of a compromise on the Irish border issue, raising hopes that a new British offer could unlock a deal with less than 180 days before Britain leaves the trading bloc. Many investors are not pricing for a deal to be announced at an EU summit later this month, but for November. Any delay beyond then is likely to hit the pound hard – most traders are reluctant to push sterling much higher until the prospect of a deal, which would then need to be passed in the British parliament, becomes much clearer.
USD/CAD is supported at 1.2886 levels and is trading at 12940 levels. It has made session high at 12954 and lows at 1.2910 levels. The Canadian dollar slipped to a one-week low against its U.S. counterpart on Friday as data showing a jump in domestic jobs was seen as not enough to trigger a faster pace of interest rate hikes by the Bank of Canada. On Monday, the Canadian dollar touched its strongest in more than four months at 1.2783 after a last-minute deal to salvage the trilateral North American Free Trade Agreement reduced uncertainty for Canada’s economy. The Canadian economy added 63,300 jobs in September, Statistics Canada data indicated. That was more than twice as many as analysts had forecast, although all the job gains were in part-time positions. In separate data, Canada recorded its first trade surplus for more than 18 months in August as unusually timed shutdowns at auto plants helped cut imports at a greater rate than exports. The central bank, which has raised interest rates four times since July 2017, said last month that it had discussed whether a gradual approach to tightening remained appropriate. Chances of a hike in October were little changed at about 85 percent after the data, the overnight index swaps market indicated. The Canadian dollar was trading 0.1 percent lower at 1.2940 to the greenback, or 77.25 U.S. cents. The currency touched its weakest since Sept. 28 at 1.2955.
USD/JPY is supported around 113.50 levels and currently trading at 113.71 levels. It peaked to hit session high at 113.89 and made session lows at 113.53 levels. The dollar weakened against the Japanese yen on Friday as the dollar softened after data showed U.S. job growth slowed more than expected last month. U.S. job growth slowed sharply in September likely as Hurricane Florence depressed restaurant and retail payrolls, but the unemployment rate fell to near a 49-year low of 3.7 percent, pointing to a further tightening in labor market conditions. The Labor Department’s closely watched monthly employment report on Friday also showed a steady rise in wages, suggesting moderate inflation pressures, which could ease concerns about the economy overheating and keep the Federal Reserve on a path of gradual interest rate increases. Nonfarm payrolls increased by 134,000 jobs last month, the fewest in a year, as the retail and leisure and hospitality sectors shed employment. Data for July and August were revised to show 87,000 more jobs added than previously reported. Economists polled had forecast payrolls increasing by 185,000 jobs in September and the unemployment rate falling one-tenth of a percentage point to 3.8 percent.
European shares on Friday posted their biggest weekly loss in a month amid persistent fears that U.S. interest rates may have to be raised quicker than expected to stop the economy from overheating after U.S. unemployment fell to near a 49-year low.
UK’s benchmark FTSE 100 closed down by 1.3 percent, the pan-European FTSEurofirst 300 ended the day down by 0.85 percent, Germany’s Dax ended day down by 1.2 percent, France’s CAC finished the day down by 1 percent.
U.S. stocks dropped for a second straight day on Friday, weighed down by another rise in Treasury yields in the wake of a solid jobs report that capped off a week of robust data.
Dow Jones closed down by 0.67 percent, S&P 500 ended down by 0.57percent, Nasdaq finished the day down by 1.19 percent.
The U.S. Treasuries market tumbled for a third straight day on Friday with the 10-year yield hitting a seven-year high, as a solid payrolls report fueled jitters about rising inflation and more interest rate hikes.
The benchmark 10-year Treasury yield rose nearly 4 basis points at 3.233 percent after hitting a seven-year peak at 3.248 percent earlier on Friday.
The 30-year yield reached a four-year high at 3.424 percent before retreating to 3.404 percent in late trading.
Gold edged higher on Friday, on track for its biggest weekly gain in six, as the dollar softened after data showed U.S. job growth slowed more than expected last month and a slide in stock markets burnished the appeal of bullion as a safe haven.
Spot gold was up 0.2 percent at $1,201.82 an ounce by 13:45 p.m. EDT (1745 GMT), and was on track to rise about 0.8 percent this week, the most since the week of Aug. 24.U.S. gold futures settled up $4, or 0.3 percent, at $1,205.60.
Crude futures steadied on Friday after climbing to four-year highs earlier this week, and both Brent and U.S. crude marked weekly gains ahead of U.S. sanctions on Iranian oil exports.
U.S. West Texas Intermediate (WTI) crude futures rose 1 cent to settle at $74.34 a barrel.
Global benchmark Brent crude futures for December delivery fell 42 cents to settle at $84.16 a barrel. On Wednesday, Brent hit its highest price since late 2014, at $86.74.
Source: FXWire Media Round Ups