North American Summary and Highlights 1 November
Overview - US employment was weaker than expected but the USD recovered from an initial dip seen on the data.
North American session
October US employment data was weaker than expected with non-farm payrolls up only 12k with 112k in net negative revisions to August and September. Unemployment was unchanged at 4.1% with weakness seen in the labor force as well as employment while average hourly earnings saw a 0.4% increase, but with the upside surprise offset by downward revisions.
The USD initially slipped on the data but with weakness blamed on temporary factors of hurricanes and a strike at Boeing, focus moved towards Tuesday’s elections and the USD ended slightly stronger overall. USD/JPY slipped to 152 before rebounding to 153 while EUR/USD after touching 1.09 moved back near 1.0850. GBP/USD reversed most of its post-data gains but held up better than most. USD/CAD moved higher near 1.3950 while AUD/USD was little changed from pre-data levels.
October’s ISM manufacturing index was also weaker than expected, slipping to 46.5 from 47.2, but had little impact. September construction spending saw a second straight marginal rise of 0.1%, in line with expectations.
European morning session
The USD gained ground against the JPY and the EUR through the European morning, but GBP managed a small recovery and the AUD held its own. USD/JPY rose 30 pips to 152.70, and EUR/USD lost 20 pips to 1.0855. The biggest loser was the CHF, which fell sharply after weaker than expected Swiss October CPI data, which rose 0.6% y/y against a market consensus of 0.8%. EUR/CHF gained 25 pips to 0.9425, and USD/CHF gained 40 pips to 0.8680.
Equities were generally stronger on the morning, with bond yields mostly little changed, suggesting that some of the equity decline on Thursday may have been end of month related.