Friday preview: All eyes on US non-farm payrolls report for September
All eyes are on the US non-farm payrolls report due out this afternoon.
Following Wednesday's resteepening in the US Treasury yield curve and a recent string of stronger than expected economic data, yields appear primed to spring higher.
Or lower, should Friday's release fall short of economists' expectations.
In the run-up to the jobs report, Ian Shepherdson at Pantheon Macroeconomics had cautioned on Wednesday that the most recent ADP report on private sector payrolls might have overstated the strength in the jobs market during the month of September, because it may have failed to capture the impact of recent hurricanes on activity.
Nevertheless, expectations ahead of the report were "sky high", said Kathleen Brooks, research director at Capital Index.
"To put this report into context: US weekly jobless claims are at their lowest level since 1969, ADP private sector employment recorded its fastest pace of growth for 7 months, and the ISM non-manufacturing survey rose at its fastest pace for a decade, and included a strong jobs component," Brooks said.
"The NFP is a crucial piece of this jigsaw. The market is already discounting the prospect of a strong report: the dollar has strengthened ahead of Friday’s data release: USD/JPY broke through 114.00, while EUR/USD is back below 1.15. The 10-year Treasury yield broke through the crucial 3% barrier this week, and yields rose at one of their fastest paces since Trump won the US Presidency. This suggests to us that the market is expecting a bumper NFP on Friday, which also means that the risk of disappointment is strong."
The consensus forecast for the US jobs report was for a 188,000 person increase in non-farm payrolls and for a 0.3% month-on-month (2.8% year-on-year) rise in average hourly earnings.
In parallel, the rate of unemployment was expected to decline by another one tenth of a percentage point to 3.8%.
Friday October 05
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Balance of Trade (US) (13:30)
Consumer Credit (US) (20:00)
Factory Orders (GER) (07:00)
Non-Farm Payrolls (US) (13:30)
Producer Price Index (GER) (07:00)
Unemployment Rate (US) (13:30)
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