NFP Data pushes the USD down


U.S. nonfarm payrolls increased 261k in October following the upwardly revised 18k gain in September (was -33k), while the 169k August gain was bumped up to 208. The unemployment rate slid to 4.1% from 4.2%. Earnings were flat following the prior 0.5% jump. The workweek was steady at 34.4. The labor force declined 765k, more than reversing the 575k September surge, with household employment tumbling 484k, halving September’s 906k increase. The labor force participation rate fell to 62.7% from 63.1%.

The dollar fell broadly following the jobs report, where NFP missed the mark by a significant margin, hourly earnings were soft, while the unemployment rate dipped to 4.1% from 4.2%. The trade report revealed a slightly wider than expected deficit, but likely had no impact on the FX market. EURUSD rallied to 1.1690 from 1.1660, as USDJPY tumbled to 113.64 from near 114.05. Yields fell, while equity futures remain fractionally higher.

The most significant mover was USDCAD as Canadian  employment grew 35.3k in October after the 10.0k rise in September. Full time jobs gained 88.7k in October after the 112.0k surge in September. Part time jobs fell 53.4k after a 102.0k tumble. The unemployment rate edged up to 6.3% in October from 6.2% in September. The participation rate rose to 65.7 from 65.6. Average weekly earnings growth improved to a 2.4% y/y pace in October, leaving the fastest rate since April of 2016. However, that is still below the 3.0% or better that the BoC desires, and hence remains suggestive of ongoing slack in the labour market. This report is better than expected at first glance, with a solid gain in total jobs and further growth in part time employment. USDCAD sank to 1.2713 before recovering to 1.2730.

Next up on a busy data day are the US Services and Non-Manufacturing PMI data numbers.

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Stuart Cowell

Senior Market Analyst


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