Market Brief, North America

Trading ranges are shrinking and short-term volatility gauges are pointing to turbulence ahead as currency market participants move to the sidelines in the run-up to tomorrow’s all-important non-farm payrolls report. Traders expect a modest slowdown in hiring and a steady unemployment rate, but uncertainty is high, and the implications for the Federal Reserve’s policy trajectory are significant. The dollar is almost unchanged, ten-year Treasury yields are inching higher after tumbling in yesterday’s session, and equity futures are pointing toward almost-imperceptible gains at the North American open. The European Central Bank cut its benchmark rates by a quarter point – as...

The dollar is inching off a two-year low as investors adopt a defensive posture ahead of this morning’s Job Openings and Labor Turnover report, which is expected to confirm a cooling in US labour market conditions ahead of Friday’s non-farm payrolls report. Mentions of layoffs on corporate earnings calls have been minimal, and unemployment claims remain well below levels that have historically signalled growing stress, but economists have drastically lowered job creation forecasts*, and market participants are bracing for an imminent slowdown. Treasury yields are slipping as traders anticipate more easing from the Federal Reserve, North American equity indices are...