Forexlive Asia-pacific FX news wrap 2 Nov:Forex market sleepwalks as traders await US jobs

The forex markets had a sleepwalk through the Asian Pacific session with little changes in the currency pairs. Japan was off for Culture Day which did not help price action, but it is also not unusual for the markets to stay calm ahead of a key release and instead let the cards fall. The jobs data will be released at 8:30 AM ET.

As a reminder, the expectations for the US jobs from the BLS shows:

• Consensus estimate +180K (range +125 to +285K)
• Private +158K
• September +336K
• Unemployment rate consensus estimate: 3.8% vs 3.8% prior
• Participation rate consensus 62.8% prior
• Prior underemployment U6 prior 7.0%
• Avg hourly earnings y/y exp +4.0% y/y vs +4.2% prior
• Avg hourly earnings m/m exp +0.3% vs +0.2% prior
• Avg weekly hours exp 34.4 vs 34.4 prior

The Fed already spoke this week and they seem content to stay calm too and let the economy react to the tightened conditions. Those conditions were partly Fed-induced through the past tightenings which have taken the Fed Funds target to 5.50% from 0.25%. More recently, market-induced tightening has done the Fed’s work for them. Although the 10-year yield is down -17 basis points this week, that part of the yield curve is still up 65 basis points since the end of August. During that rise, the Fed has been on hold. In other words, the market is doing the work for the Fed, and Chair Powell and the Fed members are thankful.

Looking at the strongest to the weakest snapshot, the JPY is the strongest and the AUD is the weakest. However, it reality the when the biggest change for a currency pair is 0.11%, the ranking is more or less a “dead heat”. A soft breeze (i.e. move) the other way, and the order can be easily be shifted completely around. The USD is near the middle of the table with a slight tilt to the downside. Again, I would not make too much into the tilt.