3 Numbers to Watch: US Nonfarms, DE factory orders & CAD jobs
Yesterday’s central bank action was a bit of a let-down in terms of price action, with EURUSD failing to make any real departure from the 1.3000 level. The Bank of England held rates steady as had been expected, and the European Central Bank had its hands tied with Spain, which left the Fed’s minutes as the only source of new information. Even this failed to act as a real catalyst.
Today we are due figures for US nonfarm payrolls and with the election in the US heating up there will be plenty of discussion about what the numbers will mean for President Barack Obama and Mitt Romney. Romney outperformed Obama at the televised debate on Wednesday, but this appears to had little impact in the polls so far. The key for investors will be how the battle for seats in the Senate and House pans out as the fiscal cliff looms.
Canada will also release its unemployment data today while German Factory orders are also due.
US nonfarm payrolls (12:30 GMT) Nonfarm payrolls are expected to rise by 111,000, but the US unemployment rate is also forecast to edge higher to 8.2%, suggesting that analysts believe the number of jobs created in September is unlikely to make up for new entrants into the labour force. In August, a meager 96,000 jobs were created, while the unemployment rate declined to 8.1%. This will be a concern not only for President Barack Obama, but Federal Reserve Chairman Ben Bernanke, who has launched a new round of quantitative easing to tackle the chronic unemployment problem in the country. However, investors may be preparing for an upset tomorrow as recent labour market data coming out of the US has been lackluster. Initial jobless claims rose by 367,000 in the week to September 29 according to data out yesterday, compared to 363,000 the previous week, while the ADP employment levels declined from 189,000 to 162,000 on Wednesday.
German factory orders (10:00 GMT) Factory orders in Germany are expected to contract in August as weaker demand and a decline in overall spending impacts manufacturers. New orders are forecast to fall by 0.5 percent for the month, according to analysts’ estimates, after expanding 0.5 percent in July, however, they are expected to edge slightly higher on a year-to-year basis. Factory orders have declined sharply since the financial crisis and have since failed to make any solid recovery. However, there have been some signs of improvement in the purchasing managers index. German Manufacturing PMI as measured by the Markit index increased to 47.4 in September from 47.4 the previous month, although this still signals a sector in contraction.
Canadian Unemployment (12:30 GMT) Also out at around lunch time in Europe, Canadian unemployment figures are likely to be overshadowed by the US nonfarm payrolls figures. Statistics Canada is expected to show that far fewer jobs were created in September, with analysts anticipating a 15,000 increase in the number of employed people for the month compared to 34,300 in August. However, the unemployment rate is expected to remain steady at 7.3 percent.
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