Markets await US September payroll report

Enrique Díaz-Álvarez02/Oct/2015Currency Updates

Yesterday was a mostly dull day in currency markets, as traders were unwilling to commit before the critical US payroll report, which is to be released today. Another strong number here will seal the case for a Federal Reserve interest rate hike before year end, and put further downward pressure on the US Dollar and Sterling.


It was a very uneventful day for Sterling, with no major economic data releases or monetary policy announcements. As such Sterling remained mostly flat against the Dollar.

Today will be a rather muted day to end the week in the UK, with the construction PMI from Markit the only major data release. Attention will shift firmly to the US and the release of the latest labour report.


No surprises in the Eurozone manufacturing PMI, which came out exactly as expected at a modestly strong 52. The Euro also traded in a tight range against all major currencies, ending the day slightly higher against the Greenback.

The main data point out of the Eurozone today will be the producer price index at 10am London time. Prices received by domestic producers in the Euro-area have remained negative year-on-year every month since September 2013. However, this announcement will more than likely be overshadowed by events in the US this afternoon.


We saw another string of solid second-tier numbers out of the US last night. Jobless claims, the manufacturing PMI sentiment index and vehicle sales all came at or above expectations. The Dollar, however, traded in a narrow range as traders remained focused in today’s all-important payroll report.

We’ll see the release of the latest labour report from the US Department of Labor at 1.30pm today. The nonfarm payrolls figure for September will, as always, be a big market mover. The unemployment rate and average earnings will also be in sharp focus among USD traders. A strong nonfarm payrolls figure, and generally positive report, would provide further weight to the argument that the Federal Reserve should begin normalising interest rates later this year.


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Written by Enrique Díaz-Álvarez

Chief Risk Officer at Ebury. Committed to mitigating FX risk through tailored strategies, detailed market insight, and FXFC forecasting for Bloomberg.