The USD steadies, oil prices tumble, equity markets rebound, and US yields rise ahead of today's key jobs report. The U.S. dollar held broadly steady near recent highs, underpinned by Treasury yields that remain close to multi-decade peaks and a still-firm underlying U.S. economic backdrop. Softer PCE inflation has reduced expectations for an immediate October Fed hike, but persistent inflation concerns and the prospect of further tightening later in the year continue to support the greenback. Attention now turns to today’s payrolls report, where a stronger-than-expected reading could quickly revive more aggressive Fed rate expectations. Global equity markets moved higher in calmer trading ahead of today’s U.S. payrolls report, with S&P 500 futures up and European shares also firmer. September job growth is expected to slow to around 90,000, with unemployment holding at 4.1% and wage growth near 3.2%; economists caution that reduced labour-force growth is helping keep unemployment low, so wages and payroll momentum may provide a clearer signal of underlying labour-market tightness. With markets now assigning a much lower probability to an October Fed hike, today’s data will be important in determining whether that repricing holds. Elsewhere, oil prices tumbled on expectations of crude and diesel reserve releases, while gold held steady. Bitcoin strengthened on improved risk appetite and renewed seasonal optimism. Today’s economic calendar includes Eurozone preliminary CPI inflation, U.S. Nonfarm Payrolls, Unemployment Rate and Average Hourly Earnings, followed by U.S. Factory Orders, alongside Fed & ECB speakers.
New Headlines. Homeowners hit as bond selloff drives up mortgage costs. Eurozone inflation surges more than expected. Oil falls about 3% on talks over diesel and crude stock releases. Carney invokes new powers to fast-track pacific oil pipeline. Sweden's Andersson gets fresh shot at forming government. Putin has told militry leaders to abandon rules of war, Zelensky says. Diesel falls sharply as the EU considers releasing 50mn barrels under pressure from Trump. Europe braces for 'severe hybrid attacks' from Russia says Merz. The US deploys thousands of troops to the Middle East as Trump weighs strikes on Iran.
In currency markets. Against the USD, currencies are generally firmer in early trading, with JPY and CHF the best performers as the dollar eases ahead of today’s key U.S. employment report. JPY is benefiting from stronger-than-expected Tokyo inflation, which has reinforced expectations for further BoJ tightening, while CHF is gaining as softer near-term Fed rate-hike expectations and safe-haven demand provide support.
In commodity markets. WTI -3.55% | Nat Gas -1.28% | Gold +0.04% | Silver +0.18% | Copper +0.15% | Palladium +1.62% | Coffee +2.57% | Cocoa +2.27% | Soybeans -0.49% | Wheat +0.55%
CAD held steady near 18-month lows after eight straight daily declines, with broad U.S. dollar strength remaining the dominant driver. Canadian manufacturing activity also softened, with the September PMI falling to 51.5 from 53.0 as trade frictions and elevated energy costs weighed on producers, while markets have reduced the odds of a near-term BoC hike. Attention now turns to today’s U.S. payrolls report, with any renewed strength in the U.S. labour market likely to keep pressure on the loonie.
EURCAD held broadly steady around 1.6000, with euro-specific concerns over France’s fiscal outlook and the broader growth impact of elevated energy costs limiting upside. The cross has nevertheless found some support as markets weigh the ECB’s inflation challenge against softer regional growth, leaving EURCAD largely range-bound ahead of today’s U.S. payrolls report.
EUR remained under pressure near recent 16-month lows despite September Eurozone inflation accelerating to 3.8%, above expectations, with core inflation edging up to 2.5%. The stronger inflation print reinforces pressure on the ECB to keep policy restrictive, but elevated energy costs and growing concerns over France’s fiscal position continue to weigh on the single currency. Attention now turns to today’s U.S. nonfarm payrolls, where a firm report could reinforce expectations for further Fed tightening and add to pressure on the single currency.
GBPEUR firmed in early trading as GBP held up better than the euro, with Eurozone inflation accelerating to 3.8% while growth and fiscal concerns continue to limit support for the single currency. Recent BoE commentary has kept the door open to further tightening if energy-driven inflation proves persistent, while the ECB remains cautious about over-tightening despite higher headline inflation. Today’s ECB speakers, including Cipollone and Vujčić, remain in focus for further guidance on the policy outlook.
GBP remained near three-month lows against the U.S. dollar, with a broad flight into the greenback and the global bond selloff continuing to weigh on the pound. Recent UK manufacturing data were also softer, with September output revised lower, offsetting some support from more hawkish BoE commentary suggesting rates may need to rise further if inflation pressures persist.
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