Get started

Hourlyearnings

Will GDP shake up GBP/USD?GBP/USD is trading quietly for a second straight day. In the North European session, GBP/USD is trading at 1.1035, down 0.18%. The pound has not posted a winning day since October 12th and has lost 400 points during that time. GBP/USD dropped below the symbolic 1.10 line earlier today, and a break below 1.10 will likely increase talk of the pound following the euro and dropping to parity with the dollar. The UK labour market is one of the few bright spots in the economy, and today's employment report reaffirmed that the job market remains tight. Unemployment in the three months to August dipped to 3.5%, down from 3.6%, while average earnings jumped to 6.0%, up from 5.5% and ahead of the consensus of 5.9%. These rosy numbers are dampened by an inflation rate of 9.9%, which has badly hurt real UK incomes. The strong job market bolsters the likelihood of the Bank of England will deliver some tough medicine at its November meeting, perhaps a super-size rate hike of 1.0%. The BoE was forced to intervene on an emergency basis after the mini-budget almost caused a bond market crash, and investors have circled October 14th, which is the expiry date of the BoE's gilt-buying intervention. There are concerns that if the BoE does not renew its bond-buying, the result could be another exodus from UK government bonds. On Wednesday, the UK releases GDP for August, which is expected at 0% MoM, down from 0.2% in July. In the US, inflation will be in focus this week, with PPI data on Wednesday and CPI a day later. Headline inflation is expected to fall to 8.1% in September, down from 8.3% in August, but core CPI is expected to rise to 6.5%, up from 6.3%. Unless inflation surprises sharply to the downside, the release will not cause the Fed to rethink its hawkish policy. GBP/USD faces resistance at 1.1085 and 1.1214 There is resistance at 1.0935 and 1.0776
by OANDA
USD/JPY eyes US nonfarm payrollsUSD/JPY has been hovering close to the 145 line most of the week, and the trend has continued today. In the European session, USD/JPY is trading at 144.81, down 0.21%. The US releases nonfarm payrolls later today. The release once received massive coverage and was usually a market-move, but the new era of high inflation and global tightening has stolen much of NFP's thunder. Still, the indicator is an important bellwether of the health of the US economy and could provide insights into future rate moves from the Federal Reserve. The consensus for the September nonfarm payrolls stands at 250,000, lower than the 315,000 recorded in August. The US labour market has been very robust, and investor reaction will likely be muted if the consensus is not wide of the mark. The markets will be more focussed on hourly earnings and the participation rate - soft readings would raise speculation that the Fed could ease up sooner rather than later, which would be bearish for the US dollar. Conversely, hot readings would support the Fed remaining hawkish, which would give the US dollar a boost. Japan will also be keeping a close eye on today's US jobs reports. The Ministry of Finance (MOF) has shown that is willing to intervene to prop up the Japanese yen, and a stronger-than-expected NFP could be the trigger for another round of intervention. Since the dramatic intervention on September 22nd, the yen has moved only slightly above the 145 level, which could well be a 'line in the sand' for the MOF.  The MOF intervention, which was meant as a warning against speculators, likely cost 2.84 trillion yen. The move led to Japan's foreign currency reserves falling to their lowest level since 2017. With the Bank of Japan capping JGB yields and the Fed continuing to deliver oversize rate hikes, the US/Japan rate differential is widening, which means the yen will likely continue to lose ground, barring another currency intervention by the MOF. There is resistance at 145.36 and 145.97 USD/JPY has support at 144.29 and 143.68
by OANDA
1