Market Roundup
• U.S., China 'not on the cusp' of trade deal -White House adviser.
• Trump predicts U.S. will reach a good trade deal with China.
• US Oct Non-Farm Payrolls, 250k, 190k forecast, 134k previous, 118k revised.
• US Oct Unemployment Rate, 3.7%, 3.7% forecast, 3.7% previous.
• US Oct Private Payrolls, 246k, 183k forecast, 121k previous.
• US Oct Average Earnings m/m, 0.2%, 0.2% forecast, 0.3% previous.
• US Oct Average Earnings y/y, 3.1%, 3.1% forecast, 2.8% previous.
• US Sep Factory Orders m/m, 0.7%, 0.5% forecast, 2.3% previous, 2.6% previous.
• US Sep International Trade Balance ($), -54.0B, -53.6B forecast, -53.2B previous, -53.3B revised.
• U.S. allows eight importers to keep buying Iran oil for now.
• U.S., Turkey lift sanctions in sign of easing tensions.
• Dublin, London, DUP talk up chances of Brexit deal
• CA Oct Employment Change, 11.2k, 10.0k forecast, 63.3k previous.
• CA Oct Unemployment Rate, 5.8%, 5.9% forecast, 5.9% previous.
• CA Sep Trade Balance (C$), -0.42B, 0.15B forecast, 0.53B previous, -0.55B revised.
Looking Ahead - Economic Data (GMT)
• 4 Nov 21:30 Australia Oct AIG Services Index, 52.5 previous
• 5 Nov 00:30 Japan Oct Services PMI, 50.2 previous
• 5 Nov 01:45, China Oct Caixin Services PMI, 53.1 previous
Looking Ahead - Events, Other Releases (GMT)
• 4 Nov 23:50 Bank of Japan releases Minutes of its September Monetary Policy Meeting in Tokyo
• 5 Nov NA ECB's Luis de Guindos, Peter Praet, and Jan Smets speak in Brussels
• 5 Nov 01:00 Bank of Japan's Haruhiko Kuroda speaks at a meeting with business leaders in Nagoya
• 5 Nov 08:00 Riksbank executive board meeting in Stockholm
• 5 Nov 13:10 Bank of Canada's Stephen Poloz speaks at the Canada-UK Chamber of Commerce in London
• 5 Nov 14:00 Euro Zone finance ministers meet to discuss deeper euro zone integration in Brussels
• 5 Nov 15:30 Norges Bank's Jon Nicolaisen participates in a rountable in London
Currency Summaries
EUR/USD is likely to find support at 1.1302 levels and currently trading at 1.1392 levels. The pair has made session high at 1.1445 and hit lows at 1.1392 levels. The euro declined against US dollar on Friday as dollar was boosted by upbeat U.S. jobs data, but gains were limited by hopes that Washington and Beijing can repair the trade tensions that have spurred safe-haven buying of the greenback. U.S. job growth rebounded sharply in October and wages recorded their largest annual gain in 9-1/2 years, which could keep the Federal Reserve on track to raise interest rates in December. The greenback draws safe haven flows during times of economic and political uncertainty. It came under pressure on Friday, after a Bloomberg report said President Donald Trump was seeking a trade agreement with Chinese President Xi Jinping before a meeting in Argentina at the end of November. A trade dispute between the world's two largest economies has cast a pall over the global economy and boosted demand for the greenback as investors view the United States to be in better shape than its rivals to weather a trade war. The dollar index , which tracks the greenback versus the euro, yen, sterling and three other currencies, hit a 16-month high on Wednesday. On Friday, the index was little changed on the day at 96.355.
GBP/USD is supported in the range of 1.2835 levels and currently trading at 1.2968 levels. It reached session high at 1.3025 and dropped to session low at 1.2950 levels. Britain's pound was on course for one of its best weekly performances against greenback in 2018 on Friday, aided by optimism for a Brexit deal and after the Bank of England signalled more interest rate hikes could be on the way if Britain's exit from the European Union is smooth.The pound enjoyed its best day of the year against the dollar on Thursday as a market betting heavily against the currency rushed to price in the possibility that a Brexit deal would be clinched. An agreement with Brussels on the terms of divorce would remove a major uncertainty overshadowing the economy and the BoE as it tries to curb inflation.While it failed to make much headway above $1.30 on Friday, after better-than-expected United States labour market data supported the dollar, sterling remained more than 1.3 percent higher against the buck this week. Money markets are not fully pricing in a full 25 basis point rate hike from current levels of 0.75 percent at any point in 2019, underscoring investor concerns about whether Britain can avoid a disruptive Brexit. The pound traded at $1.3003 in late European trade on Friday after earlier hitting $1.3042, its highest since Oct. 23.
USD/CAD is likely to find support at 1.3014 levels and is trading at 1.3101 levels. It has made intraday high at 1.3117 and lows at 1.3093 levels. The Canadian dollar dipped against the greenback on Friday, retreating from an earlier one-week high, after the release of domestic jobs and trade data that was not strong enough to raise bets for another Bank of Canada interest rate hike next month.The Canadian economy added 11,200 jobs in October on higher full-time hiring, and the unemployment rate dipped to 5.8 percent, although wage growth was sluggish, Statistics Canada data indicated. Separate data showed that Canada's trade deficit in September shrank to C$416 million as imports fell at a faster pace than exports, while August imports had been almost C$1 billion higher than initially reported. Last week, the central bank raised its key interest rate by 25 bps to a level of 1.75 percent, its fifth hike since July 2017. Chances of another hike in December were little changed at about 30 percent after the data. The Canadian dollar was trading 0.1 percent lower at 1.3102 to the greenback, or 76.32 U.S. cents. The currency touched its weakest intraday since Oct. 25 at 1.3050.The loonie's decline came as a stronger-than-expected U.S. jobs gain helped support the greenback.
USD/JPY is supported around 112.57 levels and currently trading at 113.16 levels. It peaked to hit session high at 113.24 and made session lows at 112.76 levels. The U.S. dollar strengthened against the yen on Friday as strong U.S. job growth boosted U.S dollar. U.S. job growth rebounded sharply in October and wages recorded their largest annual gain in 9-1/2 years, pointing to further labor market tightening that could encourage the Federal Reserve to raise interest rates again in December. The Labor Department's closely watched monthly employment report on Friday also showed the unemployment rate was steady at a 49-year low of 3.7 percent as 711,000 people entered the labor force, in a sign of confidence in the jobs market.The Fed is not expected to raise rates at its policy meeting next week, but analysts believe October's strong labor market data could spur the U.S. central bank to signal an increase in December. The Fed raised borrowing costs in September for the third time this year. Traders' expectations that the Fed will raise rates in December jumped to 72.1 percent from 68.8 percent on Thursday, according to CME Group's FedWatch tool.Worries that the United States and China would not reach a trade agreement earlier had driven down yields. A senior Trump administration official, speaking on CNBC on Friday, dismissed as untrue a media report that President Donald Trump was readying a possible trade deal with China.
Equities Recap
European shares had a third day of gains on Friday after U.S. President Donald Trump fueled hopes among investors that a deal to end a prolonged dispute over trade could be reached with his Chinese counterpart Xi Jinping later this month.
The UK's benchmark FTSE 100 closed down by 0.3 percent, FTSEurofirst 300 ended the day up by 0.24 percent, Germany's Dax ended up by 0.6 percent, and France’s CAC finished the up by 0.4 percent.
U.S. stocks snapped a three-day rally on Friday as Apple shares dropped following a disappointing forecast and the White House dampened optimism over U.S.-China trade talks.
Dow Jones closed down by 0.51 percent, S&P 500 ended down 0.70 percent, Nasdaq finished the day up by 1.15 percent.
Treasuries Recap
U.S. Treasury yields rose on Friday after a strong payrolls report showed job growth rebounded sharply in October, pointing to further labor market tightening that could encourage the Federal Reserve to raise interest rates again in December.
The benchmark 10-year government note yield was last at 3.212 percent, up about 6 basis points from the jobs announcement.
Yields at the short end of the curve, which reflect traders' expectations of interest-rate hikes, rose at a slower pace. The yield on the two-year note was up 4.5 basis points, last at 2.912 percent.
Commodities Recap
Gold slipped on Friday as the U.S. dollar regained some ground on the back of strong American jobs data, putting the metal on track for its first weekly loss in five weeks.
Spot gold was down 0.2 percent at $1,231.22 per ounce by 13:34 p.m EDT (1734 GMT). The bullion was down 0.1 percent this week.U.S. gold futures settled down $5.3, or 0.43 percent, at $1,233.30.
Oil prices fell about 1 percent on Friday and notched a weekly loss of over 6 percent, as investors worried about oversupply after the United States said it will temporarily spare eight jurisdictions from Iran-related sanctions.
Brent crude futures fell 6 cents to settle at $72.83 a barrel. U.S. crude declined 55 cents to end the session at $63.14 per barrel, a 0.86 percent loss.
