US Dollar Remains Stable Ahead of NFP Employment Report

Market Reviews

US dollar remains stable against major currencies, including the Japanese yen and the euro, in anticipation of today’s non-farm payroll (NFP) report. Australian dollar and New Zealand dollar remain the weakest ones, on monetary policy divergence and risk aversion in Asia. US Treasury yields have reached their highest levels since May 2011, as strong economic data hinted that the jobs report could exceed expectations. 10-year yield closed up 0.036 at 3.197. 30-year yield closed up 0.036 at 3.355.

On the stock markets, DOW lost 0.75% and closed at 26627.48. S&P 500 dropped by 0.82% while NASDAQ declined even worse by 1.81%. In Asia, Nikkei fell by 0.52%, Hong Kong HSI is down 0.42%, Singapore Strait Times declined by 0.94%.

The report on jobs in the non-farm sector will be published today. Employment growth continued in August (employers added 201.000 jobs), and experts expect another strong increase in September. Economists are expecting NFP report to show 188k job growth in September. Unemployment rate is expected to drop 0.1% to 3.8%. Average hourly earnings are expected to rise 0.3% mom.

Benoit Coeure (ECB Governing Council) said in a speech yesterday that the euro area economy is in the best shape it has been in for many years. And, GDP is “well above the levels we observed before the great financial crisis.” He also pointed out that labor market has “improved notably” in recent years.

Today’s data showed, that Australia retail sales grew 0.3% in August in seasonally adjusted term, matched expectations. There were rises in five of the six industries, except that food retailing was relatively unchanged at 0.0%. Japan overall household spending rose 2.8% yoy in August, versus expectation of 0.2% yoy. Labor cash earnings rose 0.9% yoy versus expectation of 1.3% yoy.