NONFARM PAYROLLS FRIDAY
The global financial markets converge on US nonfarm payrolls on Friday. The monthly report is expected to show a dismal pace of hiring for the world’s largest economy after a pair of devastating hurricanes ripped through the southern states of Texas and Florida.
European markets open with a report on German factory orders, which is due at 06:00 GMT. Orders are projected to climb 0.7% in August after falling 0.7% the month before. Compared to August 2017, factory orders likely rose 4.7%, forecasts show.
France will release its latest trade figures at 06:45 GMT. The Eurozone’s second-largest economy is expected to report a trade deficit of €5.4 billion, down from €6 billion the month before. Separately, MINEFA will also release the French budget balance for August.
Data on Spanish industrial production and Italian retail sales will be released over the next hour or so, leading us to the start of North American trade.
The US Department of Labor will release its nonfarm payrolls report at 12:30 GMT. The release is expected to show the addition of 90,000 nonfarm jobs in September, down from an August growth rate of 156,000. The jobless rate likely held steady at 4.4%.
Analysts say average hourly earnings probably rose 0.3% on month and 2.5% annually.
At the same time, the Canadian government will also release its latest jobs figures. Canada’s economy is projected to add 14,500 jobs in September, following a gain of 22,200 the month before.
Later in the session, Federal Reserve Governors William Dudley, Robert Kaplan and James Bullard will deliver speeches that will be closely monitored by the financial markets. The Fed will hold its second-to-last policy meeting of 2017 on 31 October, with the official rate statement scheduled for the following afternoon. No change in policy is expected until at least December.
The euro reversed course on Thursday and is now trading below 1.17 US. The EUR/USD has been on a sharp downtrend for the past two weeks, as the dollar rebounded against a basket of world peers. Weakness below 1.1725 puts the pair on track for a re-test of the 1.1675 region. On the opposite side of the ledger, the immediate resistance zone is likely found around 1.1800.
After a disastrous month of August, the USD/CAD has been on a gradual uptrend back toward the 1.2600 region. The pair is converging on that handle, having gained nearly 500 pips since 8 September. The Canadian dollar could see further upside in the months ahead as the Bank of Canada signals for higher interest rates. For now, the pair is looking to steamroll 1.2600 en route for two-month highs near 1.2700.
Cable broke below 1.31 on Friday to trade at one-month lows. The currency pair is down 0.3% at 1.3085. Although there are some signs that the selloff is overdone, a stronger dollar could push the GBP/USD back toward the critical 1.3000 threshold in the near term.