Analysts noted that the unemployment rate, which they expect to be at 4.1%, will offer a better view of the overall health of the labor market.
The Fed announces its policy decision two days after Tuesday’s US presidential election.
Republican candidate Donald Trump and Democratic Vice President Kamala Harris remain tied in several polls, but some investors have been placing trades betting on Trump’s victory, lifting the dollar and US Treasury yields.
The dollar index, which measures the performance of the US currency against six other currencies, rose 0.2% to 104.08 points. Last month it rose 3.1%, the biggest increase since September 2022, and it looks like it will hold firm for now.
The yen gave up some of Thursday’s gains, falling 0.4% to 152.65, ahead of a three-day weekend in Japan and a series of major risk events.
The yuan in international markets fell 0.15%, to 7.1316 units per dollar, while the yuan in continental stock markets lost 0.1%, to 7.252 units per dollar.
The euro fell 0.17% to $1.0864, but remained near two-week highs against the dollar, having risen this week following news that euro zone inflation accelerated more than expected in October and that the German economy showed signs of growth.
Sterling was trading steady at $1.2907 but headed for its fifth consecutive week of losses against the dollar.
Among cryptocurrencies, the bitcoin, The world’s largest cryptocurrency by market capitalization, fell 0.76% to $69,397, after gaining almost 10% in October.
Friday’s nonfarm payrolls report is in the spotlight ahead of Tuesday’s U.S. presidential election, and the Federal Reserve’s monetary policy meeting, which concludes Thursday, will contribute to further volatility in equity markets. values, which are already digesting the results season.
The pan-European STOXX 600 index gained 0.6%, but is heading for its worst week in almost two months. These gains were offset by the decline in Asian stocks, especially in Japan, causing MSCI’s measure of global stocks to trade flat.
US markets, which fell the day before, should see some relief later. Nasdaq futures rose 0.4%, boosted by Amazon’s 5.3% rise after markets closed on Thursday.
Markets are all but assuming a quarter-point interest rate cut next week, although they are ruling out a bigger move they previously considered possible, as data show the U.S. economy remains in good health.
Beyond that, all eyes are on Tuesday’s elections. Polls point to a close race, although investors have been placing trades betting that Republican candidate Donald Trump will prevail over Democratic Vice President Kamala Harris.
“The election has definitely boosted the market this week and, with the state of the US economy, probably explains why bond yields have risen in the US,” said Yvan Mamalet, senior economist at Kleinwort Hambros.
The yield on 10-year notes improved 1 basis point to 4.3%, just below the nearly four-month high of 4.339% hit this week.
The biggest movements of the week in public debt markets have occurred in the United Kingdom, where the return of gilts rose for the third consecutive day. The yield on the benchmark 10-year debt was operating at 4.496%, with an increase of 26 basis points in the week, which would represent the largest movement of this type in a year.
Sales have been boosted by the budget presented by the new Labor government, which has stoked concerns about inflation and growth. The pound sterling appreciated against the euro and the dollar in the session.
In raw materials, crude oil prices extended their advance for the third day and gained more than 2.5%, after reports that Iran is preparing a retaliatory attack against Israel from Iraqi territory. Gold rose 0.2% to $2,750 an ounce.
Source: Ambito
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