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Markets Await U.S. Nonfarm Payrolls Data

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USD

On Friday, the Greenback railed to its highest level in seven-week vs. a basket of major currencies, amid optimism among traders ahead of the crucial U.S. nonfarm payrolls data. The U.S. dollar strengthened after the Department of Labor reported on Thursday that initial jobless claims declined more than expected to 260k last week.

The U.S. dollar also supported after the U.S. House of Representatives approved a 2018 spending bill, which is considered as an important step to advance an eventual tax reform plan. However, Federal Reserve officials warned in rare public remarks that President Donald Trump's tax plan could lead to inflation and unsustainable federal debt.

On the release front, markets are awaiting the U.S. nonfarm payrolls report, which is expected to fell to 90k from 156k.

  • The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.17%, to settle at 93.93 pips.

EUR

Euro fell as much as 0.20% to settle at $1.1687 vs. the Greenback with political tensions in Spain continued to weigh. In addition, the single currency battered yesterday, after the ECB Sept meeting minutes showed that the monetary policy should be highly adaptive in all scenarios.

GBP

The British pound fell as much as 0.40%, to settle at $1.3065 for the first time in almost a month. The Sterling Pound declined on fears that Theresa May be ousted by Tory MPs in the wake of her conference meltdown and worries over the health of the UK economy. Today, markets are awaiting Unit Labor Costs (YoY) (2Q) data.

JPY

The Greenback rose as much as +0.22% vs. the JPY, to settle at ¥113.06, on a strong U.S. data and as risk appetite improved.

On the release front, data on Friday showed Japanese workers' wages jumped in August from a year earlier in a sign of a gradual pick-up in household income.

Gold

Gold prices drifted further away from seven-week highs hit earlier this week, as traders are awaiting Friday’s nonfarm payrolls, although the data will likely be widely biased by the effects of hurricanes in Florida and Texas. The number of Americans filing for unemployment benefits declined more than expected last week, but the continued impact of Irma and Hurricanes Harvey on the data made it difficult to get a clear picture of the U.S. labor market.

Gold Futures - Dec 17 (GCZ7) fell as much as 0.21%, to settle at $1,270.50.

Oil

Earlier today, oil prices declined lower, as investors grew more cautious due to the possibility of supply disruptions caused by incoming tropical storm Nate, despite the continuing sings that markets are gradually re-balancing the prices. Meanwhile, oil prices benefited by the prospect of extended oil production cuts by OPEC.

The U.S. West Texas Intermediate crude November contract fell as much as 0.24%, to settle at $50.67, while Brent Oil Futures - Dec 17 rose as much as 0.21%, to settle at $57.12.

Economic Calendar (all times in GMT)

  • USD Change in Non-farm Payrolls (SEP): (GMT 12:30) – Important – Forecast (80k) – Previous (156k).
  • USD Unemployment Rate (SEP): (GMT 12:30) – Important – Forecast (4.4%) – Previous (4.4%).

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