Dollar recovers broadly today as markets turn focus back to key economic data from US. While the greenback is trading in red against most major currencies, Canadian dollar is even weaker as WTI crude oil extended recent decline and took out 45 handle. Non-farm payroll report from US is expected to show 150k growth in October with unemployment rate dropping back to 4.9%. Looking at other employment data, ADP employment grow slowed to 147k and missed expectation of 160k. Initial jobless claims rose steadily in October with the four week average increased from 253k to 258k. Employment component of ISM manufacturing showed notable improvement from 49.7 to 52.9. However, the employment component of ISM non-manufacturing dropped from 57.2 to 53.1. Conference board consumer confidence also dropped fro 103.5 to 98.6. Judging from these, today's non-farm payroll is more likely a disappointment. And even if Dollar would be lifted by an upside surprise, strength is likely limited as markets remain concerned with the uncertainties of the November 8 presidential election.
On the other hand, Sterling is set to close as the strongest major currency this week. The pound was firstly lifted by High Court ruling that Prime Minister Theresa May's trigger of Article 50 for Brexit must get parliamentary approval. The ruling could delay the Brexit process. And, theoretically, the process could even be stopped. Meanwhile, lawmakers are now in a position to influence the approach to Brexit and forces May to adopt a "softer" way. Secondly, BoE removed rate cut bias as Governor Mark Carney suggested the central bank has "a neutral bias around policy going forward" as the "monetary policy can respond in either direction". The members voted unanimously to leave the policy rate unchanged this month. The chance of a rate cut this year has become very remote. More in Hawkish BOE Removed Easing Bias.
In Eurozone, Bundesbank head Jens Weidmann warned that "the risks of ultra-loose monetary policy are becoming increasingly clear." And, "even with monetary policy rates unchanged, the increase in inflation rates automatically leads to lower short-term real interest rates and, therefore, to a further loosening of the monetary policy stance." Also, "monetary policy cannot afford to ignore these developments if banks' health problems endanger the monetary transmission mechanism, or doubts about the stability of life insurance or pension companies prompt households to increase their precautionary savings."
Elsewhere, Australia retail sales rose 0.6% mom in September versus expectation of 0.4% mom. Eurozone will release PMI services final and PPI today. US will release trade balance and non-farm payroll. Canada will also release employment data and Ivey PMI.