The USD slipped, oil prices eased, equity markets are up, and US yields are mixed ahead of key US jobs data. An air of cautious optimism returned, helping support global equity markets. In the US equity futures slipped with Apple Inc. under pressure in pre-market trading after revenue from China disappointed investors. USD continues under pressure following Thursday's steepest weekly decline since mid-July. Investors look for guidance from today's US Nonfarm payroll data for signs that the US Federal Reserve tightening cycle is nearing an end. Bloomberg economists expect hiring to slow to 180k in October, less than half of the 336k jobs in September. Oil prices are set for a second weekly loss as the Israel-Hamas conflict remains contained, while global economic concerns continue to dampen demand. Alongside US Nonfarm payroll data, the focus will be on US Average Hourly Earnings, CAD Net Change in Employment, CAD Unemployment Rate, and US Services PMI will help provide intraday direction to currency markets.
In other news. Sam Bankman-Fried convicted of fraud in stunning FTX collapse. BoE Governor Bailey vows to hold the line on inflation in the face of sickly UK outlook. Musk tells Sunak AI will render all jobs obsolete. US Secretary of State arrives in Tel Aviv as Israeli forces surround Gaza City. Russia pounds Ukraine with overnight air strikes. The US House passed a bill providing Israel with $14bn new aid. The US targeted China, Turkey, and the UAE in the latest Russian sanctions. Nasdaq 100 futures slip after Apple reports earnings.
In currency news. Asian currencies rallied, Philippine peso set for its best day in 14 years. AUD & NZD are on track for their biggest weekly jump in four months. The Pound steadies after the BoE holds interest rates steady and rules out quick interest rate cuts. CNY is flat, while Asian currencies are up 0.2%, and the PHP rallied 1.3% vs USD. Trading currencies are mixed with NOK & ZAR sliding 0.2%, MXN down 0.1%, JPY & AUD are flat, while the CHF firms 0.1%, NZD & SEK are up 0.2% vs USD.
In commodity markets. Oil prices slip 0.2%, Natural gas prices rallied by 1.9%, Gold prices firmed by 0.2%, Silver prices fell by 0.45%, Copper prices dropped by 0.4%, Wheat prices are up by 0.15%, and Soybean prices gain by 0.25%.
CAD holds steady after the loonie notched up its biggest rally since June as bond yields fell, and the USD suffered its biggest decline since mid-July. The CAD steadies as investors focus on both the US and Canadian jobs data for signs of the domestic economy's strength for potential direction for the central banks at their next meeting. CAD Net Change in Employment (Oct) is expected to drop to 22.5k near 1/3rd of September which printed at 63.8k, and the unemployment rate is expected to edge higher to 5.6% vs 5.5% in September.
EURCAD edges higher in early trading, regaining some lost ground from the loonies' strongest rally in 5 months on Thursday.
EUR extends gains towards 1.0650 as investors remain cautious ahead of key US jobs data. The Euro is strengthening on a weaker USD story vs positive Euro data. The USD selloff has continued since the Federal Reserve indicated that it was nearing its peak in its interest rate cycle by the end of 2023. Investors are focused on the US Nonfarm Payroll numbers out today which are expected to contract to 180k vs 336k in September after Fed Chair Powell said that they will make policy decisions on 'totality of data, balance of risk'. A stronger-than-expected US Payroll number would likely put the Euro back under selling pressure.
GBPEUR holds near 5-month lows as the pound fails to find any significant support from the BoE Governor's comments on Thursday.
GBP steadies at 1.2200 ahead of the US NFP data. The pound finds support from the dovish Fed and hawkish BoE comments, but investors remain cautious ahead of the key US NFP data out later this morning. The BoE kept rates unchanged yesterday with a vote of 6-3, with policy member Haskel who voted to hike rates and his hawkish comments helped provide support to the pound. All focus will be on US jobs data for signs of domestic US economic strength.
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