U.S. Session Forex Recap – Nov. 4, 2016

  • U.S. initial jobless claims at 265K vs. 257K
  • U.S. preliminary non-farm productivity at 3.1% vs. 1.7% forecast in Q3
  • U.S. preliminary unit labor costs up 0.3% vs. 1.6% forecast in Q3
  • Challenger job cuts down 39.1% vs. -24.7% previous
  • ISM non-manufacturing PMI down from 57.1 to 54.8 vs. 56.2 consensus
  • U.S. factory orders up by 0.3% vs. 0.2% forecast in Sept

Economic data from the U.S. came in mostly below expectations while markets closed lower yet again, but the Greenback managed to put up a bit of a fight.

Major Events:

Mostly downbeat U.S. data – Forex junkies might need to scale back their December Fed rate hike expectations since U.S. economic reports have printed mostly downbeat results. Only factory orders came in slightly better than expected with its 0.3% uptick versus the projected 0.2% gain in September.

Preliminary non-farm productivity jumped to 3.1% in Q3, higher than the estimated 1.7% figure, but this didn’t translate to higher pay for workers since preliminary unit labor costs inched up 0.3% versus the projected 1.6% rise. This suggests that employees may have simply gotten overworked, as they increased their efficiency and productivity but didn’t reap commensurate benefits.

Still on the jobs front, initial jobless claims came in at 265K, higher than the estimated 257K figure and the previous 258K reading, indicating that hiring may have lost some of its momentum. Challenger job cuts fell 39.1% in October since employers were seen to postpone layoffs ahead of the elections. The ISM non-manufacturing PMI posted a sharper slide from 57.1 to 54.8 versus the estimated dip to 56.2, with the index for employment down from 57.2 to 53.1 to reflect slower hiring.

Another down day for U.S. equities – Wall Street continued to bleed as stock indices closed in the red for the eighth day in a row. By the looks of it, investors are starting to trim their higher-yielding holdings ahead of the November 8 elections, especially since polls continue to show a narrowing lead by Clinton against Trump in the midst of the FBI probe on her private email server.

  • Dow 30 index down 28.97 points to 17,930.67 (-0.16%)
  • S&P 500 index down 9.28 points to 2,088.66 (-0.44%)
  • Nasdaq down 47.16 points to 5,058.41 (-0.92%)
  • S&P 500 VIX up 2.76 points to 22.08 (+14.29%)

Major Market Movers:

USD – The Greenback chalked up another day in losses, weighed down by a not-so-hawkish FOMC, pre-election jitters, and profit-taking ahead of the NFP.

AUD/USD climbed from .7671 to .7691, NZD/USD advanced from .7305 to .7337, EUR/USD rose from 1.1075 to a high of 1.1121, USD/JPY resumed its slide from 103.18 to 102.89, and USD/CHF consolidated just below .9750.

Watch Out For:

  • 12:30 am GMT: Australian retail sales (0.4% expected, 0.5% previous)

See also:

London Session Recap

Asian Session Recap

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