US Employment Report Published; Attention Also on Canada Employment Statistics Released Simultaneously! ~ Highlights for November 2 and Event Schedule ~

◎ Today’s Highlights

1)U.S. NFP Employment Statistics

Today, the U.S. NFP employment data will be released. The unemployment rate and average hourly earnings will also be released. The highlight is the growth in average hourly earnings!

The U.S. employment situation is solid. When the unemployment rate falls below 5%, it is often said that full employment is near. The U.S. unemployment rate has fallen below 4% and is approaching the 3% range. With full employment, most people are employed, so attention turns to wage growth. In Japan, lifetime employment is common and promotions and raises occur within companies, but in the U.S. people advance through changing jobs. Therefore, within the 3% unemployment rate, those unemployed for a job change are included. Naturally, they are included in new hires as well.

Looking at this situation, people are likely getting raises while changing jobs (headhunting). Therefore, attention is on how much wages have risen, and the average hourly earnings, which reflects wage growth, is in focus.

Also, the Fed views rising income as essential for sustaining price increases. From that perspective, average hourly earnings are also in focus.

2)U.S.–China Relations and Oceania Currencies

Yesterday, both sides said that U.S.–China relations appear to be improving. The market took it positively, entering a risk-on stance.

Additionally, due to the deterioration of U.S.–China relations and concerns about China’s economic slowdown, commodity currencies, especially Oceania currencies like the Australian dollar, were pressured. Following yesterday’s remarks, Oceania currencies rebounded.

In addition, the surplus in Australia’s trade balance released yesterday also helped gains. Today, Australia’s retail sales are announced.

Today too, we will monitor whether this risk-on trend and Oceania currency strength continue.

3)Midterm Elections Approaching and the U.S. Dollar / U.S. Stocks

With the midterm elections next week, the market has become sensitive. U.S. stocks fell sharply last week but rebounded strongly this week. The declines and gains have been large, resulting in significant volatility.

One index that measures the level of the U.S. dollar, the Dollar INDX, rose to a recent high yesterday, then fell sharply. The dollar weakened.

Today, the employment statistics, which are among the most important U.S. indicators, will be released. With the midterm election being a close race, there is also attention on whether President Trump’s statements or tweets will affect employment results and stock prices.

4)Post-Super Thursday: Pound Trend

Yesterday, there were statements suggesting progress in Brexit negotiations. Although ultimately a denial was issued, the pound rose sharply. Since there was no notable drop after the denial, it seems the pound had been oversold recently.

Additionally, Bank of England’s monetary policy release appeared broadly hawkish. Although there were no changes to policy, the statement, press conference, and Quarterly Inflation Report showed a mix of hawkish and doveish tones. Economic outlook looks pessimistic, with downward revisions, but Brexit negotiations seem to be viewed with optimism.

Today too, when statements regarding Brexit negotiations are made, the pound could move significantly, so exercise caution.

5)Canada Employment Statistics

While not as prominent as the U.S. data, Canada’s employment statistics will also be released at the same time. Canada is currently in a rate-hike cycle, and the Bank of Canada recently raised rates. Further rate hikes will depend on data. The results of the employment statistics will influence expectations for future rate hikes. Because it affects rate expectations, moves in Canada’s data often exceed those of the U.S. employment statistics. Personally, I am paying more attention to Canada’s employment statistics than to recent U.S. data.

6)U.S. Daylight Saving Time Ends

Over the weekend, the U.S. ends daylight saving time and moves to standard time. Starting next week, markets will open one hour later.

◎ Today’s Event Schedule

11/2 (Friday)

09:30 AUDRetail Sales
17:15 EUR Spain Manufacturing PMI
17:45 EUR Italy Manufacturing PMI
17:50 EUR France Manufacturing PMI
17:55 EUR Germany Manufacturing PMI
18:00 EUREurozone Manufacturing PMI
18:30 GBPUK Construction PMI
21:30 USDNFP Employment, Unemployment Rate, Average Hourly Earnings
21:30 USD Trade Balance
21:30 CADCanada Employment Change & Unemployment Rate
21:30 USD Trade Balance

11/3 (Saturday)

02:00 USD Baker Hughes Rig Count
03:00 EURNovotný (Noves) Central Bank President Speech
03:00 EURLane (Finland) Central Bank President Speech
03:00 EURSmetz (Belgium) Central Bank President Speech
03:00 EURStournaras (Greece) Central Bank President Speech

11/4 (Sunday)

New York – U.S. Daylight Saving Time Ends

◎ Recording Room

↓↓↓ Yesterday’s stock prices, long-term rates, and key officials’ statements are recorded below ↓↓↓

Recording Room for November 1 — Stock Prices, Rates, Key Officials’ Statements