Market Roundup
•US October jobs up 161k v 175k forecast prior month revised up, unemployment rate 4.9% on target.
•US Avg Hourly earnings +0.4% v 0.3% forecast, U-6 rate drops to 9.5%, lowest since May 2008.
•U.S. trade deficit hits 1-1/2-year low, -36.4b v -37.8b forecast, on rising exports.
•Fed’s Lockhart: doesn’t expect a recession in near-term, negative rates wouldn’t be 1st or 2nd resort for Fed.
•Atlanta Fed’s GDPNow upgrades US Q4 GDP view to 3.1% from 2.3% on Nov 1.
•NY Fed’s Nowcast sees Q4 GDP at 1.6% from prev 1.4%.
•Sterling enjoys the best week since 2009 as ‘hard Brexit’ fears ease.
•UK PM May confident a court ruling on govt approval for A50 would be overturned, vowed to stick to her Brexit timetable.
•Saudis could raise oil output again as sparring with Iran returns,
Tension over Saudi request for Iran to freeze output.
Looking Ahead - Economic Data (GMT)
•00:30 Australia ANZ Internet Job Ads Oct -0.3%-previous
•00:00 Japan Overtime Pay Sep -1.9%-previous
•22:30 Australia AIG Construction Index Oct 51.4-previous
•23:50 Japan Foreign Reserves Oct 1260.10b-previous
Looking Ahead - Events, Other Releases (GMT)
23:50 Japan (SUN) Bank of Japan to publish the minutes of September policy meeting.
Currency Summaries
EUR/USD is likely to find support at 1.1081 levels and currently trading at 1.1121 levels. The pair has made session high at 1.1126 and hit lows at 1.1087 levels. Euro rose higher against US dollar as dollar declined on uncertainty ahead of next week's U.S. election, despite a solid U.S. jobs report that supported expectations for a Federal Reserve rate hike next month. Traders largely looked past the U.S. October nonfarm payrolls report, which showed wage growth that reinforced bets of a rate hike in December, choosing to position themselves ahead of an increasingly uncertain race for the White House. The jobs report showed a year-on-year increase in average hourly earnings of 2.8 percent, the biggest gain since June 2009, from 2.7 percent in September. U.S. employers added 161,000 jobs last month, below expectations for a gain of 175,000. The gain was still seen as an indication of a strong pace of hiring. The dollar surrendered brief gains notched against the euro after the U.S. jobs report. The euro was last trading mostly flat against the dollar at $1.1107 after initially slipping 0.2 percent to a session low of $1.1081.
GBP/USD is supported in the range of 1.2480 levels and currently trading at 1.4505 levels. It reached session high at 1.2556 and hit low at 1.4524 levels. Sterling jumped higher against the dollar on Friday, as worries eased that Britain would undergo a "hard" exit from the European Union and lose its access to the single market. Under pressure pound has recovered back almost 3 percent this week, rising on a ruling from England's High Court on Thursday that the government needed parliamentary approval to start the Brexit process. Investors are hoping that lawmakers - a majority of whom supported staying in the EU in June's referendum - will be emboldened by the ruling and will push for a "soft" Brexit in which Britain keeps close trade ties with the bloc. With the dollar struggling amid concerns over a possible victory for Donald Trump in next week's U.S. presidential election, sterling hit a four-week high of $1.2558, up 0.8 percent on the day. Despite this week's rebound, sterling is still down 16 percent against the dollar since June's referendum and has so far failed to reach the $1.26 mark that technical analysts said would suggest a sustained recovery.
AUD/USD is supported around 0.7613 levels and currently trading at 0.7651 levels. It hit session high at 0.7463 and made session lows at 0.7430 levels. The Australian dollar inched higher against US dollar on Friday as the dollar declined on raising concerns over next week's U.S. election. U.S. nonfarm payrolls added 161,000 jobs last month, boosting worker wages, supporting the case for a December U.S. interest rate increase. The dollar index was on track for its biggest weekly drop since mid-August after the Federal Bureau of Investigation said last week it was reopening a probe into Democrat candidate Hillary Clinton's use of a private email server while Secretary of State. However, the U.S. elections remained a key risk for financial markets with Democrat Hillary Clinton and Republican Donald Trump neck and neck in some opinion polls days ahead of the Nov. 8 presidential election. A Trump victory is likely to unnerve financial markets due to a high degree of uncertainty about his policies on trade, foreign policy, and immigration, while Clinton is seen as a candidate of the status quo.
USD/CAD is supported at 1.3359 levels and is trading at 1.3403 levels. It has made session high at 1.3436 and lows at 1.3388 levels. The Canadian dollar weakened against its U.S. counterpart on Friday, as Canadian dollar was weighted on the weak trend in the country's exports and lower oil prices. The country also posted a record trade deficit of C$4.1 billion in September but the figure was boosted by the one-off import of machinery for an oil project. Oil futures were on course for their sixth straight day of falls on Friday as signs of tensions resurfaced between Saudi Arabia and Iran that could scupper a key supply cut pact while a surge in U.S. crude inventories and muted demand continued to weigh. U.S. employers maintained a strong pace of hiring in October and boosted wages for workers, which could effectively seal the case for a December interest rate increase from the U.S. Federal Reserve. The Canadian dollar was trading at C$1.3398 to the greenback, or 74.46 U.S. cents, weaker than Thursday's close of C$1.3383, or 74.72 U.S. cents.
Equities Recap
European shares slumped on Friday, weighed down by weaker drugmakers after two U.S. lawmakers called on federal antitrust regulators to open an investigation into possible price fixing.
UK's benchmark FTSE 100 closed down 1.4 percent, the pan-European FTSEurofirst 300 ended the day down by 0.75 percent, Germany's Dax ended down 0.6 percent, France’s CAC finished the day down by 0.7 percent.
The S&P 500 ended lower on Friday for a ninth straight day, the longest losing streak for the benchmark index in more than 35 years, as investors stayed on edge ahead of an uncertain U.S. election.
Dow Jones closed down by 0.23 percent, S&P 500 ended down by 0.16 percent, Nasdaq finished the day down by 0.23 percent.
Treasuries Recap
U.S. Treasury prices gained on Friday as oil prices dropped, raising concerns about low inflation, and as uncertainty about next week’s U.S. Presidential election enhanced the appeal of lower risk assets.
Benchmark 10-year notes were last up 5/32 in price to yield 1.80 percent, after rising as high as 1.83 percent on the employment data.
Commodities Recap
Gold steadied on Friday, heading for its biggest weekly rise since mid-September as jitters over next week's U.S. election offset a solid payrolls report that shored up expectations for a U.S. interest rate hike next month.
Spot gold was at $1,303.53 an ounce at 1512 GMT, off a low of $1,295.71 in the immediate wake of the payrolls data but little changed from $1,303.25 on Thursday. U.S. gold futures for December delivery were up 0.1 percent at $1,304.60.
Oil futures on Friday were on course for their biggest weekly percentage declines since January of just under 10 percent as signs of tensions resurfaced between Saudi Arabia and Iran that could scupper a key supply cut pact.
Brent futures fell 73 cents to $45.62 a barrel, a 1.6 percent loss, by 11:49 a.m. EDT (1549 GMT). U.S. crude fell 60 cents to $44.06 per barrel, a 1.3 percent loss.
