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US Jobless Claims higher, Market waits for NFP


U.S. equities traded lower throughout yesterday’s trading. The Dow Jones Industrial Average slipped 1.15% to close at 29926.94. The S&P 500 dropped 1.02% to close at 3744.52. The tech-heavy Nasdaq Composite edged 0.68% lower to close at 11073.31.

U.S. initial jobless claims came in at 219K, above market expectations of 190K. The upside surprise of jobless claims sparked a brief rally among equities; however, market participants will now turn their focus on today’s nonfarm payrolls figure and the unemployment rate to better gauge the health of private sector hiring.

In contrast to traditional thinking, worse-than-expected payroll gains and higher-than-expected unemployment rates could be a good signal for equities. A slowdown in private sector hiring could provide proof of the Fed’s tightening efficiency.

The benchmark U.S. 10-year treasury yield rose on Thursday and was last seen trading at 3.821%.

Other key factors that market participants should be aware of are the average hourly earnings figures, which are estimated to increase by 0.3% month over month and 5.1% over the year. A lower figure could indicate the Fed’s tightening showing its effect; conversely, an upside surprise could point to further tightening on the horizon. Recent remarks from Fed officials have reaffirmed the Fed’s stance on its determination on bringing inflation down.

Main Pairs Movement

The Dollar index rose 0.47% throughout yesterday’s trading. The U.S. Greenback extended gains from the 5th as U.S. treasury yields recovered above 3.8%. Market participants will now turn their focus to today’s nonfarm payrolls and unemployment rate figures to gauge the Fed’s next move.

EURUSD dropped 0.91% throughout yesterday’s trading. Recent hawkish comments from Fed officials have added selling pressure on the Euro-Dollar pair. ECB monetary policy meeting minutes indicated possible tightening by the ECB as members believe inflation to still be rampant in Europe.

Cable retreated 1.45% throughout yesterday’s trading. U.K. PMI figures came in at 52.3, above the market consensus of 49.2.

XAUUSD dropped 0.22% throughout yesterday’s trading. The return of strength for the Dollar acted as a headwind for the non-yielding metal.

Economic Data

CurrencyDataTime (GMT + 8)Forecast
CNYCaixin Manufacturing PMI09:30 
CNYManufacturing PMI09:30 
EUREU Leaders Summit18:00 
USDNonfarm Payrolls (Sep)20:30250K
USDUnemployment Rate (Sep)20:303.7%
CADEmployment Change (Sep)20:3020.0K