US Dollar Expects NFP Report for Support

Market Reviews

US dollar retreats slightly in expectation of tomorrow’s non-farm payrolls (NFP) report, which could give additional boost to the greenback. The British pound is trading as the strongest one for today on news that Brexit negotiation is making progress. Japanese yen and euro are also firm. Australian dollar and New Zealand dollar are the weakest ones on monetary policy divergence and risk aversion.

Global stocks were mostly lower today. FTSE declined by 1.0% while CAC lost 1.12%. DAX is the relative better performing one as it rose by 0.08%. In Asia, Japanese Nikkei lost 0.56%, Hong Kong HSI dropped by 1.73%, Singapore Strait Times fell by 1.1%.

Today’s data showed, that US initial jobless claims fell by 8k to 207k in the week ended September 29, slightly expectation of 206k. Continuing claims dropped by 13k to 1.65m in the week ended September 22. Four-week moving average of continuing claims declined by 15.25k to 1.6645m (the lowest level since October 27, 1973).

The World Bank lowered East Asia and Pacific growth forecast in 2018 from 6.6% to 6.3%. It is also projected that growth will slow to 6.0% in 2019, down from 6.1%. The World Bank also expects, that China’s economic growth will slow to 6.5% in 2018. China’s GDP growth projection was revised lower from 6.3% to 6.2% in 2019.

The IMF pointed that risks for Japan economic growth have increased, despite Japanese economy continues to “grow above potential”. It urged that “reinvigorated policies are needed to reflate the economy, boost potential growth, and put public debt on a sustainable path.” On trade, IMF emphasized that “Continued advancement of multilateralism and bolder domestic policies are needed to mitigate inward spillovers, including from potential trade-war escalation.” Though, Japan’s leadership in furthering multilateralism can help mitigate the possible effects of trade war escalation.