The U.S. Dollar is trading in weak ranges to begin a week with labor as the focus along with the potential for havoc if the U.S. government shuts down.
Overview
Across market classes, there is growing concern that the U.S. government will need to get a deal to keep funding itself or risk having bills and contracts unpaid. With labor already a bit fragile, government issues could add to the sluggishness in participation and exacerbate Initial Jobless Claims. We shall see where labor stands as Non-Farm Payrolls are scheduled for Friday, making them the most important risk event for the week.
Investors and traders are wondering if the data could be bad enough to incentivize the Fed to slash multiple times earlier than according to current odds. The chances of 50 basis points being reduced by end of the year have gone down but there is growing chance of seeing the loose policy materialize by January. Nevertheless, announcement of further tariffs at end of last week is making economists nervous that levies on pharmaceuticals will only add to inflationary pressures going forward. Buck mostly tight as the moves faded.
What to Watch This Week…
- Euro-zone CPI, Wednesday
- US Nonfarm Payrolls, Friday 8:30AM
- Monex USA Online is always open
EUR ⇑
The Euro is trading in improved levels after losing a bit last week after excellent American growth results from Q2. Meanwhile on the other side of the pond, Confidence is picking up a little bit and idiosyncratic national issues are being worked on, particularly in France where the past few months have been hectic. This week we will learn if inflation remains tamed after we look at Consumer Price Index from September on Wednesday and get a glimpse of productivity and investment from Purchasing Managers Index numbers on Friday.
