US NFP data to show slowdown in job creation but strong wage growth ahead of polling day

Matthew Ryan, CFA Ebury

US growth surprised modestly to the downside in the third quarter of the year, according to data released on Wednesday. The economy posted annualised expansion of 2.8%, which was below the 3% estimate.

This is a very marginal miss, however, and the data remains consistent with a healthy economy that continues to be well supported by robust consumer spending and a resident labour market.

Today’s NFP data will almost certainly show a slowdown in net job creation in October, but wage growth is set to remain high at around 4% YoY. As mentioned, investors will be closely monitoring US election developments in the next few trading sessions, with Americans set to go to the polls on Tuesday.

Trump remains the front runner in the polls and prediction models, but his apparent advantage appears to have waned this week, and markets are back viewing the election as almost akin to a coin-toss.”

Author

Matthew Ryan, CFA

Ebury

Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold turns negative near $4,300 post-US CPI

Gold adds to Thursday’s weakness, trading comfortably in the sub-$4,400 zone per troy ounce at the end of the week. The yellow metal keeps the offered bias in the wake of the release of US inflation figures in August and amid the decent advance in the US Dollar.

Ripple Price Forecast: XRP extends decline as returning ETF inflows fail to lift outlook

Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.

Weekly focus – The hawks set the tone

Risky assets came under pressure this week as energy prices kept creeping higher and the ECB surprised the markets with a hawkish tone. The price of Brent crude touched USD 110 per barrel on Thursday night, highest since mid-May, as news emerged that the Yemeni Houthis had reached control of key port cities and islands near the Bab el-Mandeb strait.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.