| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 06:45 | France | Industrial Production, m/m | August | 0.2% | 0.2% | 1.4% |
During today's Asian trading, the US dollar declined slightly against major currencies, but remains near its highest level since August 19, reached yesterday. The dollar's pullback was caused by partial profit-taking and correction of positions by investors ahead of the publication of a key report on the labor market, which may clarify the extent of the Fed's monetary policy easing.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.15% to 101.84. Since the beginning of this week, the index has jumped by 1.46%, but the situation may change dramatically after publication of the nonfarm payrolls report (at 12:30 GMT). After unexpected resilience over the past couple of years, job growth is finally slowing down. The average monthly growth in nonfarm payrolls has slowed from 250,000 in 2023 to just 116,000 in the last three months. The slowdown is due to several factors, including higher interest rates affecting purchases of high-value goods - from houses to cars and furniture. As demand declined, so did pricing and profit margins, which combined to affect hiring. In addition, the upcoming November elections increase uncertainty about the prospects, which also has a deterrent effect. The expected increase in the nonfarm payrolls by 140 thousand in September will emphasize that the situation on the labor market has hardly changed. It is also expected that the average hourly wage increased by 0.3% in September, which will keep the annual rate at a nearly three-year low of 3.8%. The unemployment rate probably remained unchanged (4.2%). Overall, experts continue to expect a slowdown in hiring in the coming months. Concerns about the labor market at the Fed have intensified, and officials are focusing on further actions. Any unexpected weakness in the employment reports released before the FOMC meeting on November 7 may prompt officials to make another significant rate cut, given their demonstrated willingness to respond aggressively to the risks of a declining labor market. According to the CME FedWatch Tool, markets see a 34.7% probability of a 0.50% rate cut at the November meeting (down from 53.3% a week earlier) and a 45.6% probability of a 0.25% rate cut in December (compared to 49.7% a week earlier), with a 0.7% rate cut expected by the end of the year.
The yen rose 0.45% against the US dollar, but remained near the more than 6-week low, reached yesterday. Since the beginning of the week, the yen has fallen by about 2.9%, which is the largest decline since May 2022. The yen was pressured by the statements of the new Prime Minister Shigeru Ishiba, which increased expectations that the Central Bank of Japan will not rush to tighten monetary policy.