FRIDAY IS NONFARM PAYROLLS DAY
On Friday, the US Department of Labor will release the most closely watched data event of the month. The October nonfarm payrolls report will make its way through the financial markets at 12:30 GMT, and could set the tone for the remainder of the session.
The monthly jobs report is expected to show a whopping 312,000 jobs added to the economy last month, following a decline of 33,000 in September that was caused by volatile weather in Texas and Florida. The jobless rate is expected to hold steady at 4.2% with average weekly hours going unchanged.
On Wednesday, payrolls processor ADP Inc. said private sector employers added 235,000 workers in September. That was much higher than the 200,000 forecasted by economists.
NFP data influence everything from stocks to forex. Any reading that deviates significantly from the consensus forecast is likely to trigger a volatile response from the market.
The Commerce Department will also release its September trade balance during the same time as the NFP report. The trade deficit is forecast to expand slightly to $43.2 billion from $42.4 billion the previous month.
Later in the day, the Institute for Supply Management (ISM) and IHS Markit will unveil the latest services PMI report for October. The ISM report is expected to show a slight cooldown in non-manufacturing growth after the PMI approached 60 in September.
A report on US factory orders will also make headlines at 14:45 GMT. Orders for factory goods are expected to climb 1.3% month-on-month.
On the policy front, Federal Open Market Committee (FOMC) member Neel Kashkari will deliver a speech at 16:15 GMT.
Of course, the financial world stretches far beyond the United States. North of the border, the Canadian government will also release its monthly jobs report for October. The net change in employment is expected to show a monthly gain of 15,000 jobs for Canada. Unemployment is widely expected to remain at 6.2%.
Statistics Canada will also report on the latest trade balance for September. Canada’s trade deficit is forecast to shrink to $3 billion during the month.
The euro gained some upward traction on Thursday, but failed to generate significant support above 1.1670 US. The EUR/USD was last seen trading roughly 10 pips below that level, with investors setting their sights on nonfarm payrolls.
The Canadian dollar clawed back some of its recent declines on Thursday, with the USD/CAD crumbling back toward the 1.2800 handle. Friday will be a big session for the pair, with data from both countries set to make headlines.
Crude prices are trading at their highest level for 2017, a sign that investors are more comfortable with the supply/demand outlook. US crude prices were up again on Friday, adding half a percent to $54.83 a barrel. The market has enough momentum to continue higher, based on the fundamental indicators.