The U.S. Dollar is trading in mostly weak ranges to start off October as it looks like labor struggles may once again be on the spotlight.
Overview
ADP Employment Change figures from this morning showed that in September the private payrolls and accounting firm registered a contraction in the measure. Last month saw a decrease of (-32K) instead of the expected 5K expansion. Meanwhile, the August figures were drastically revised downward with the original 54K reading reduced to a surprising negative print of (-3K). While not always correlated to the official numbers scheduled for this Friday, this indicator serves as evidence that there is serious sluggishness when it comes to hiring and adds to the likelihood that the Fed will see interest rate cuts as appropriate.
Tomorrow, we have August Factory Orders and Durable Goods Orders before the pivotal Non-Farm Payrolls Friday. We are also waiting for any solutions to the U.S. government shutdown, which is keeping Congress and headlines busy. The data releases may be impacted by this so we will monitor how to navigate a blind Jobs-Friday if we have to. Treasury bonds advanced in price while the 10-year yield retreated. In the equity realm, the S&P 500 Index managed to have its best September run in 15 years. As a new quarter starts we will also be getting data reviewing Q2 performance that may move the FX needle some.
What to Watch This Week…
- US Nonfarm Payrolls, Friday 8:30 AM
- Monex USA Online is always open
GBP ⇑
The Pound is climbing by about half a percent this morning as inflationary pressures keep building up that make it less likely the Bank of England will be exercising looser monetary policy. The BOE will not be gathering until their November 6th meeting, but it looks like they will remain cautious about cutting interest rates when prices continue to climb for the Housing sector. September Nationwide House Px climbed by half a percent when only 02% was estimated, thus bringing the annual average to 2.2% over the 1.8% forecast. Issues with spending and lack of momentum have plagued Sterling, but now all focus is on dollar deterioration that mixed with central bank policy divergence is aiding GBP value.
MXN ⇑
The Mexican Peso is rising slightly as economic indicators have come out as expected. LATAM currencies have been all over the place lately, but the Peso is back to gaining ground after a stellar September that saw it rise in value by 2.3%. Consumption and remittance figures will be out the next couple of days and may add to the appreciation while the Buck seeks direction in the midst of a government shutdown.
