Created
: 2025.10.03
2025.10.03 20:21
The US Dollar (USD) fell a little Wednesday on the back of the soft ADP report but rose more significantly yesterday after an obscure private sector report (Revelio Labs anyone?) report apparently suggested the NFP data would show an above consensus outcome of a gain of around 60k in jobs, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
"Would, if it was actually being released this morning. We do note that Chicago Fed's labour market data forecast, also released yesterday, suggests a strong probability that the unemployment rate would remain at 4.3% in September which might infer less need for the Fed to act aggressively on rate policy--but markets are not expecting that anyway. Swaps continue to price in a 25bps cut at the end of the month and are close to fully pricing (around 90%) 50bps of cuts through year-end."
"The USD is tracking lower overall this morning and heading for a technically soft close on the week in DXY terms but whether that really drives any pick up in momentum remains to be seen. More meandering in the USD seems likely in the absence of official US economic data which may keep the DXY between 97.5/98.5 for now. FX investors have been whipsawed by US political developments this year and may just sit on their hands until the US government shutdown situation becomes clearer. Investors appear to be resolved to the idea that the US federal government may be closed for a lengthy period, similar perhaps to the 35-day shutdown in President Trump's first term."
"Overnight news is scant and there is little movement in the major currencies to note. Global stocks continue to forge ahead and major bond markets are narrowly mixed. High beta FX is outperforming marginally (NZD, ZAR) while the JPY is lagging with a small net loss on the day--but may still close the week with a solid gain and remains underpriced relative to the narrowing in US/Japan yield spreads we believe. While the payrolls data is unlikely to make an appearance today, we do get some US data (final PMIs and ISM Manufacturing plus some remarks from the Fed's Miran (voter), Logan (non-voter) and Jefferson (voter) over the course of the session."
Created
: 2025.10.03
Last updated
: 2025.10.03
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