DXY was up last night but came off the highs. EUR the mirror image as usual:
Australian dollar was soft:
Oil fell. So did coal and LNG futures:
Base metals struggled:
Big miners managed a squeak:
EM stocks are at the cliff edge:
EM junk is over it:
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Yields fell:
Which helped lift stocks:
Westpac has the wrap:
Event Wrap
US private sector payrolls increased 568k in September (vs 430k expected, 340k prior). Employment in the service sector led the rise, with leisure/hospitality notable.
Senate Republican leader McConnell is reportedly offering Democrats an agreement on extending the US debt ceiling to December, alleviating the immediate risk of a default.
Event Outlook
Australia: Payrolls for the week ending September 11 will be materially impacted by the NSW and Vic delta lockdowns.
China: The market is forecasting September foreign reserves to be $3,220bn, little changed from August and the first half of 2021.
US: Initial jobless claims for the week ending Oct 2 are expected to be modestly lower than the last print (market f/c: 349k). The FOMC’s Mester will speak on inflation dynamics.
ADP was strong:
Private sector employment increased by 568,000 jobs from August to September according to the September ADP® National Employment ReportTM. Broadly distributed to the public each month, free of charge, the ADP (NASDAQ:ADP) National Employment Report is produced by the ADP Research Institute® in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual data of those who are on a company’s payroll, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis
“The labor market recovery continues to make progress despite a marked slowdown from the 748,000 job pace in the second quarter,” said Nela Richardson, chief economist, ADP. “Leisure and hospitality remains one of the biggest beneficiaries to the recovery, yet hiring is still heavily impacted by the trajectory of the pandemic, especially for small firms. Current bottlenecks in hiring should fade as the health conditions tied to the COVID-19 variant continue to improve, setting the stage for solid job gains in the coming months.”
There is no correlation month-to-month with the BLS but in trend terms they are similar so this bodes well for Friday’s jobs report.
That would be US dollar bullish and bearish just about everything else.
Written By:
David Llewellyn-Smith
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