(Bloomberg) - A dollar gauge steadied as traders are looking ahead to Friday’s US payrolls report that will provide more insight on the health of the labor market. The New Zealand dollar, Australian dollar and the yen were outperforming peers in the Group-of-10 currencies.
WHAT TO WATCH:
- India rates
- Indonesia foreign reserves
- Thailand foreign reserves
THURSDAY TRADING SESSIONS (as of ~1pm New York time):
- The Bloomberg Dollar Spot Index down 0.1%
- “The U.S. Dollar is trading in steady ranges as markets cool down ahead of key labor data out of the US,” Juan Perez, director of trading at Monex, wrote in a note. “The Employment Situation for September will likely cause a heavy move for Dollar flows one way or the other especially after stellar Job Openings caused fear of high-interest-rates-for-long”
- READ: Traders Pile on Strong Dollar Bets as Bond Yields March Higher
- The Federal Reserve may be putting its hoped-for soft landing of the economy at risk by tacitly accepting a run-up in long-term interest rates to the highest levels since 2007
- Asia Pacific G-10 FX
- USD/JPY down 0.5% to 148.41
- AUD/USD rose 0.5% to 0.6359
- NZD/USD rose 0.8% to 0.5958
- Treasury 10-year yields fell 2.1bps to 4.71%; while the 5s30s curve steepened 6.8bps to 20.0bps
TOP NEWS:
- The Federal Reserve may be putting its hoped-for soft landing of the economy at risk by tacitly accepting a run-up in long-term interest rates to the highest levels since 2007.
- Futures traders have record sums riding on the outcome of the Fed’s November policy meeting.
- Federal Reserve Bank of San Francisco President Mary Daly said policymakers can hold interest rates steady if the labor market and inflation continue to cool or financial conditions remain tight.
- Emerging-market investors remained on edge despite a relief rally on Thursday, with Goldman Sachs Group Inc. saying narrower rate differentials between developing nations and the US leave riskier assets vulnerable to further losses.
- A mid-November US government shutdown, already a serious risk, is increasingly likely following the toppling of House Speaker Kevin McCarthy and worsening of an intra-party Republican conflict in the House.
- Applications for US unemployment benefits remained historically low last week, highlighting ongoing strength in the labor market.
- Hedge fund launches reached the highest levels in more than a year in the second quarter, led by those specializing in volatility and inflation-linked strategies.
- Mortgage rates rose for a fourth straight week, reaching the highest level since December 2000.
- There are no grounds at present for the European Central Bank to raise interest rates any further, Governing Council member Francois Villeroy de Galhau told Handelsblatt.
KEY VIEWS:
- US 10-Year Yield Has Scope to 5.15%, Bank of America Says
- Beware of Claims China is Selling Dollars, Says US Trade Expert
DATA RELEASED THURSDAY:
- (US) Sept. Challenger Job Cuts YoY, actual 58.2%, prior 266.9%
- Sept. Continuing Claims, actual 1.66m, est. 1.67m, prior 1.67m, revised 1.67m
- Aug. Trade Balance, actual -$58.3b, est. -$59.8b, prior -$65b, revised -$64.7b
- Sept. Initial Jobless Claims, actual 207,000, est. 210,000, prior 204,000, revised 205,000
- (Canada) Aug. Int’l Merchandise Trade, actual 720m, est. -1.41b, prior -990m, revised -440m
- Sept. IVEY Purchasing Mangers Index, actual 53.1, prior 53.5
Reporting By Anya Andrianova
