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  • richard evans

Golden week for China, watching US employment numbers for the rest of us

Good morning

The UD just managed to avoid a government shutdown with a last minute deal that takes us through to 17th November, more of a postponement than anything more concrete. I still find it incredible that a world superpower can find itself in such a situation. Can you imagine what would happen if the UK government said it was shutting down and sending workers home. There would be uproar. Anyway the US dollar made small gains on the open, GBPUSD trading down to 1.2180 and EURUSD to 1.0560, bot just off those lows as I type at 1.2200 and 1.0580 respectively, with GBPEUR 1.1535.

Markets have started reasonably quietly, the early Asian session in particular was quiet which is no surprise given China, South Korea, Australia are all closed today and some, like China, for another week. Japan remains open, USDJPY is up at 149.65, 15 pips or so off the highs, nothing new from Japan officials so yen remains weak. Will we see 150 this week? It was October 2022 when we saw the previous high just short of 152.00, then we go back to 1990 when it reached the 160 area

Fed officials today include Powell who is unlikely to steer away from the ‘near peak, but rates higher for longer’ stance. US nonfarm payrolls out at the end of this week, likely to be the highlight although plenty of data to come before then including the JOLTS and ADP job data. Some will look at US jobs data for clues as to whether Fed will look to raise rates in November, any strong data will certainly get the hawks excited.

Europe won the Ryder cup over the weekend, I didn’t get to see much of it but from what I did see there was some exceptional golf being played. I did watch Spurs v Liverpool where of course the result was right (for me) but the match was blighted with another rather poor performance from VAR which resulted in Liverpool having a goal disallowed. Huge sigh of relief for me, and just as well given Spurs struggled to score against a 9-man Liverpool (no complaints about the sendings off mind you).

I’m getting more used to VAR, I was dead against it an one point, now I’m more neutral, but they do seem to make life very difficult for themselves. And why can’t those at the ground, and indeed watching on TV, hear the conversation between the referee and the off-field officials, as we can hear in rugby. It all just looks as though they are trying to hide something, when VAR checks should actually make things more transparent. OK, people will still disagree with whatever decision is made but at least they may hear the reasoning behind a decision.

BoEs Mann speaks later today, one of the more hawkish members so I’d expect to see something from her suggesting she still sees a need for higher rates, or certainly sees no chance of rate cuts any time soon. RBA rate meeting in the early hours of tomorrow morning, likely to get a similar message from them, Bullock expected to keep rates on hold at her first meeting as Governor. I did wonder whether Bullock would look to make her mark with a 25bps increase, although back in September I had suggested she might try harder to not surprise the markets than Lowe, her predecessor. 15 usd pips buys an overnight 0.6425 AUDUSD call just in case.

- 09.00 EU manufacturing PMI

- 09.30 UK manufacturing PMI

- 10.00 EU unemployment

- 14.30 CAD S&P manufacturing PMI

- 14.45 US markit manufacturing PMI

- 15.00 US manufacturing ISM

- 16.00 Feds Powell, Harker speak

- 16.00 BoEs Mann speaks

- 18.30 Feds Williams speaks

- 22.00 NZ NZIEY business confidence

- 01.30 AUS building permits

- 04.30 RBA rate announcement

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