• The dollar rose broadly on Friday after the release of U.S. factory orders and services sector data that beat estimates, reversing an earlier slide after an underwhelming October jobs report.
The dollar broadly held onto gains made in the last session following Friday's stateside data releases. The dollar index stood at 94.940 at 8:19 a.m. HK/SIN after touching as high at 95.015 on Friday.
Against the yen, the greenback firmed to trade at 114.21, above Friday's close of 114.06.
The euro EUR= turned negative against the dollar, falling to its lowest level since Monday after the U.S. factory orders and ISM non-manufacturing PMI data, while the dollar turned positive against the Japanese yen JPY=, erasing earlier losses and nearing its highest since mid-July.
• Digital currency bitcoin took another leap higher, rocketing above $7,000 for the first time after a more than tenfold increase in value over the past year.
It hit as high as $7,500 on the Luxembourg-based Bitstamp exchange on Friday BTC=BTSP.
• U.S. job growth accelerated in October after hurricane-related disruptions in the prior month, but wages grew at their slowest annual pace in more than 1-1/2 years in a sign that inflation probably will remain benign.
Nonfarm payrolls increased by 261,000 last month as 106,000 leisure and hospitality workers returned to work, the Labor Department said in its closely watched employment report on Friday. That was the largest gain since July 2016 but below economists’ expectations for a jump of 310,000 jobs.
Data for September was revised to show a gain of 18,000 jobs instead of a decline of 33,000 as previously reported.
• Average hourly earnings slipped one cent in October, leaving them unchanged in percentage terms, in part due to the return of the lower-paid leisure and hospitality workers. Wages shot up 0.5 percent in September. They were up 2.4 percent on a year-on-year basis last month, the smallest gain since February 2016, after a 2.8 percent advance in the prior month.
October’s job growth acceleration reinforced the Federal Reserve’s assessment on Wednesday that “the labor market has continued to strengthen,” and the sluggish wage data did little to change expectations it will raise interest rates in December.
Tepid wage growth supports the view that inflation will continue to undershoot the Fed’s 2 percent target. Should wage growth remain sluggish, economists say it would be hard for central bank policymakers to hike rates three times next year as they currently anticipate.
• Although the unemployment rate fell to near a 17-year low of 4.1 percent in October, from 4.2 percent in the prior month, it was because the labor force dropped by 765,000 after a surprise rise of 575,000 in September.
• The Institute for Supply Management (ISM) reported today the non-manufacturing activity in October was again strong.
• The index ISM uses to measure non-manufacturing growth—known as the NMI—eked out a 0.3% increase to 60.1 (a reading above 50 indicates growth).
• Traders see a 90.2 percent chance of a rate hike at the central bank’s next meeting, according to Thomson Reuters data.
• JPMorgan Chase & Co on Friday raised its forecast on the number of U.S. interest rate increases by the Federal Reserve next year to four from three as the October payrolls data reinforced the view of a tightening domestic labor market.
• Minneapolis Federal Reserve Bank President Neel Kashkari said on Friday that there is no sign of rising inflation and that the U.S. central bank should hold off on raising interest rates until that changes.
Kashkari also said he does not expect any major differences to how monetary policy is decided when Fed Governor Jerome Powell succeeds Chair Janet Yellen as leader of the Fed next year.
• One of the Federal Reserve’s most influential policymakers, New York Fed President William Dudley, is preparing to retire earlier than planned, further setting the stage for a fresh slate of U.S. central bankers next year.
According to two sources familiar with the plans, directors at the New York Fed have struck a committee to seek a successor to Dudley, who would leave some time next year, before his term expires in January 2019.
• Republicans’ tax plan would not make adjustments retroactive, White House economic adviser Gary Cohn said on Friday, despite calls from U.S. lawmakers who want cuts to apply to 2017 as the party aims to pass the bill by year’s end.
• U.S. House of Representatives Speaker Paul Ryan said on Sunday that Republican lawmakers are weighing a “host of ideas” as the House tax-writing committee begins revising a tax bill this week, though he expects the broad outlines to remain the same.
• Prime Minister Theresa May on Monday will stress to wary business leaders a commitment to securing a transitional deal once Britain leaves the European Union, seeking to assuage fears of a cliff-edge departure.
• In a speech to the Confederation of British Industry, May will highlight the importance of a transitional agreement after she recently unnerved executives by saying any deal would not be agreed until the entire exit agreement is sealed.
• Oil prices rose on Friday, with U.S. crude touching a two-year high, strengthening after U.S. rig data suggested drilling in the United States would throttle back.
The latest rig data supported the market’s view that a global supply glut is receding. Throughout the week, prices have been bolstered by rising global demand data and expectations that OPEC and other producing countries will extend a deal to cut output.
- U.S. West Texas Intermediate (WTI) crude settled up $1.10 or 2 percent, at $55.64 a barrel, the highest since July 2015.
- Global benchmark Brent futures settled up $1.45 or 2.4 percent at $62.07 a barrel. Brent has risen around 38 percent since its low in June 2017.
Both grades gained more than 3 percent in the week.
• A gunman massacred at least 26 worshippers and wounded 20 others at a white-steepled church in southeast Texas on Sunday, carrying out the latest in a series of mass shootings that have plagued the United States, authorities said.
The lone suspect, wearing black tactical gear and a ballistic vest and carrying an assault rifle, opened fire after entering the First Baptist Church in Sutherland Springs in Wilson County, about 40 miles (65 km) east of San Antonio.
After the shooting, the gunman, described as a white man in his 20s, was fired on by a local resident. He fled in his vehicle and was later found dead in neighbouring Guadalupe County.
Reference: Reuters, CNBC
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