Market Drivers For November 03, 2017
Europe and Asia
AUD: Retail Sales 0.0% vs. 0.4% eyed
North America
USD: NFP 8:30
CAD: Employment 8:30
USD: ISM 10:00
A typical quiet night ahead of the NFP release today with currencies essentially at a standstill in Asia and early European trade.
The only mover overnight was Aussie which got battered on weak Retail Sales once again. Australian Retail Sales printed at 0.0% versus 0.4% eyed as high household debt and low wage growth all weighed on consumer sentiment. The news will likely leave the RBA firmly in a neutral stance and should continue to put pressure on Aussie, especially against the kiwi which has found support once again at the .6800 level.
In North America, both US and Canada report labor data, with US NFPs, of course, the key focus of the market. The forecast is for a whopping 310K rebound versus a decline of -33K last month and may be a bit optimistic. One key reason for such a huge turnaround is that September saw a decline of -127K jobs in Florida due to hurricane Irma. However, not all employees may have returned to work by October so the prospect of a smaller than expected bounce is quite real.
More importantly, last month's data took a lot of hospitality and restaurant workers out of the mix and as a result may have inadvertently pushed average wages higher than anticipated. With the return of those workers this week, average hourly earning may actually rise at a much more modest pace which would complicate matters for Fed policymakers who want to initiate a sustained tightening cycle. A weak report could send USD/JPY below the 113.00 level creating a triple top for the pair. However, if the numbers surprise to the upside, USD/JPY will likely test the 115.00 barrier.