The US job creation engine snapped back into high gear in September, crushing odds on a second outsized rate cut at the Federal Reserve’s November meeting. According to data just released by the Bureau of Labor Statistics, 254,000 jobs were added in the month, topping the 150,000 consensus forecast, and revisions to the July and August prints saw them rise by a combined 72,000 positions. Wage gains...

Traders are signing pre-nuptial agreements with their positions this morning, avoiding exposure to downside risk ahead of a potentially-pivotal non-farm payrolls report. The dollar’s gains are slowing after the biggest weekly advance in six months, Treasury yields are steady, and North American equity futures are flat Uncertainty is high. Consensus estimates suggest that the US added 150,000 jobs...

The NZD’s revival against the AUD, which washed through from end-July to mid-September on the back of stronger dairy prices (NZ’s major export) at the start of the new season and concerns about China’s property sector, looks to have run its course (chart 1). Fundamentals are swinging back in favour of the AUD, and in line with our long-held view, we think these underlying trends could persist over...

• Oil spike. Comments by US President Biden relating to the Middle East conflict pushed up oil. Shaky risk sentiment supported the USD. AUD a bit lower.• GBP weaker. Dovish BoE rhetoric weighed on GBP. AUD/GBP near levels last traded in mid-July. AUD/NZD higher ahead of next week’s RBNZ meeting.• US jobs. US non-farm payrolls released tonight. Signs conditions are cooling may see the USD reverse...

The dollar is holding near a two-week high, boosted by safe haven demand and a diminishing sense of conviction in a steep rate-cutting cycle from the Federal Reserve. Oil prices are still grinding higher as investors await an expected Israeli retaliation for Tuesday’s Iranian missile attack, and risk appetite remains suppressed across the financial markets. Both the West Texas Intermediate and Brent...

Fear levels are subsiding across global financial markets after Iran launched at least 180 ballistic missiles at Israel yesterday without inflicting large numbers of casualties or causing significant damage to infrastructure. Oil prices remain elevated, Treasuries are in demand, and the dollar is holding its gains after the attack triggered a flight to safety – but trading ranges are narrowing,...

• Geopolitics. Developments in the Middle East dampened sentiment. Equities & bond yields declined. USD a little firmer. AUD modestly lower.• Oil & vol. Brent crude prices increased, but now look to be tracking inline with fundamentals. Measures of volatility also not showing much stress.• NZD weaker. NZD fell, AUD/NZD rose. NZIER Survey showed price pressures are cooling fast raising the odds...

• China focus. The surge in China’s equity market continued yesterday. Iron ore prices also higher. This helped the AUD add to recent gains.• Fed Chair. US yields & the USD clawed back some ground in overnight trade after Chair Powell tempered expectations about outsized rate cuts.• Data driven. US Fed is data driven. Interest rate expectations & USD will be sensitive to whether US data...

• Mixed markets. Equities in China continue to power ahead, while lower inflation weighed on European/US bond yields. USD near 2024 lows.• AUD holding. AUD remains near the top of the range it has occupied since early-2023. Diverging policy expectations & China stimulus are supportive.• Event radar. China PMIs released today. EZ CPI is out (Tues), while in the US non-farm payrolls rounds out the...

The Federal Reserve’s preferred inflation measure continued its moderation in August and personal spending missed expectations, helping bolster bets on a second consecutive oversized rate cut at the central bank’s November meeting. Data released by the Bureau of Economic Analysis this morning showed the core personal consumption expenditures index rising 0.1 percent from the prior month, undershooting...