There was some good news and some bad news for the US on Friday. Non-farm payrolls in September increased by 134,000, which was some way below the 185,000 the markets had been expecting. We did learn that August’s figure had been upwardly revised to 270,000 from 201,000 but September’s reading was the lowest for a year. Hurricane Florence hit the Carolinas in mid-September and is at least partly responsible for the disappointing figure.
However, the unemployment rate dropped to 3.7% from 3.9% in the previous two months and better than the 3.8% expected. It is the lowest jobless rate since December 1969. Guess which reading Donald Trump referred to in a Tweet? Average earnings came in as expected by falling to 2.8% from 2.9% the previous month. Ultimately, the readings point to less inflationary pressure in America than Wall Street had feared. The dollar duly weakened against sterling and the euro.
Like the UK, there are no releases from the US on today’s schedule. Tomorrow we will see consumer inflation expectations, while Wednesday brings us the mortgage application figures up to 5 October 2018. Things really pick up on Thursday, when we have the inflation rate for September, which is expected to dip to 2.4% from 2.7% in the previous period.
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business trader on 020 7898 0500 or your Private Client trader on 020 7898 0541.
