It is much-awaited nonfarm payrolls day in the US. Market participants all over the world will scrutinise this report, as it holds the clue to the timing of the next Federal Reserve (Fed) interest rate increase. Nonfarm payrolls are expected to have risen during the last month. In addition to this, the US average hourly earnings and unemployment rate data will also be keenly followed by investors.

In the UK, the just released data showed that the nation’s manufacturing production rose less than expected in August, but industrial production declined. Investors now await the release of Britian’s NIESR GDP estimate for 3 months ended September, due later today. Meanwhile in the Eurozone, German, French and Spanish industrial output data for August brought some cheer to the region.

Pound Sterling – UK Markets

The Pound has extended its previous session losses against the US Dollar this morning. However, Sterling has managed to recoup some of its losses against the greenback after plunging to a 3-decade low earlier in the session and is now back above the 1.24 handle. The just released data showed that UK’s manufacturing production rose less than expected, while industrial production registered a surprise decline for August. Later on, Britian’s NIESR GDP estimate for 3 months ended September is scheduled to release. The indicator has posted a steady gain of 0.3% during the past 2 months.

Overnight, the sudden crash in Sterling against its major peers left global currency markets in a state of shock. Market participants believed that the flash crash might have been triggered by a “fat finger” error coinciding with French President Francois Hollande’s call for a “Hard Brexit”. Separately, Britain’s Finance Minister, Philip Hammond, tried to reassure jittery financial markets yesterday by stating that the UK economy remains fundamentally strong, but acknowledged that next year will be “turbulent”.

US Dollar – US Markets

The US Dollar is trading in the positive territory against the Pound and Euro this morning. Market participants will be focused on the US nonfarm payrolls data and unemployment rate, both for September, which could provide further insights on the timing of the next interest rate rise by the US Fed. Nonfarm payrolls are expected to have increased in September, while the unemployment rate is anticipated to remain steady. Moreover, traders await speeches from 3 key Fed officials for further cues in the greenback.

The greenback strengthened against the major peers yesterday. Data showed that the number of Americans filing for unemployment benefits unexpectedly dropped last week, nearing a 4-decade low level, indicating continued firmness in the nation’s labour market and strengthening the case for an interest rate increase by the US Fed by the end of this year.

Euro – European Markets

The shared currency is trading mixed against the US Dollar and the Pound this morning. Data released earlier in the session showed that seasonally adjusted German industrial production rebounded in August from a weak July and recorded its biggest increase since January this year, as a pickup in manufacturing production made up for a drop in construction output. Meanwhile in France and Spain, industrial output advanced faster than expected in August. Separately, French trade deficit remained unchanged in August. The nation’s exports rose, lifted by sales of aerospace goods to foreign markets, and imports advanced amid increased demand for foreign-made cars and drugs.

Yesterday, the European Central Bank’s September monetary policy meeting minutes revealed that the central bank intends to push on with its aggressive stimulus policy of negative interest rate and massive bond buying programme until it is happy with the Eurozone’s inflation rate. Following this, markets heaved a sigh of relief that the flow of cheap money won’t be prematurely turned off. On the data front, German factory orders surged in August.

Other Currencies – Highlights

The Canadian Dollar is trading on a weaker footing against the greenback this morning. Today, market participants will be on the lookout for 2 employment reports, namely the US nonfarm payrolls and Canada’s unemployment rate data. Of these, the US Dollar – Canadian Dollar currency pair will be mainly influenced by the US employment report, as it holds insights into the US Fed’s future interest rate path. In Canada, the unemployment rate is expected to hold steady at 7.0%. Another market mover today will be the Bank of Canada’s (BoC) business outlook survey report, which will reveal Canada’s business sentiment. In addition to this, the nation’s Ivey purchasing managers’ index for September is also up for release today.

During the previous trading session, data showed that Canadian building permits surged ahead of expectations in August. Separately, the BoC’s Senior Deputy Governor, Carolyn Wilkins, delivered a dovish outlook for the Canadian economy, citing that complex adjustments to falling energy prices along with an ageing population will slow down the nation’s economic growth process.