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The euro is trading at its lowest level against the Norwegian krone since August 2015. The euro is near its best levels against the Swedish krona in nearly as long.
True to its recent habit, the US dollar is finishing the week on a firm note. On the month, though, the greenback has fallen against most of the majors, but sterling, the Canadian dollar, and the Swedish krona.
Let's admit that the monthly non-farm payroll report is among the most difficult for economists to forecast. There are not many reliable inputs as it is the first piece of real sector data for a new month.
Nevertheless, it is an important piece of economic data, and which, as we saw earlier in the year, a significant downside miss could freeze the Fed.
Upward pressure on US consumer prices is stemming from two elements. Rents and medical services. Due to the differences in the composition of the basket of goods and services that are used, the core personal consumption deflator, which the Fed targets, typically lags behind core CPI.
The US dollar has firmer against most major and emerging market currencies. It remains well within its well-worn ranges, which continue to be narrow. A notable exception today is the yen's weakness.
The US dollar is enjoying a firmer bias today, but it remains narrowly mixed on the week. It is within well-worn ranges. Of the several themes that investors are focused on, there have not significant fresh developments.
Italian Prime Minister has set the date for the constitutional referendum as late as practically possibly. It will be held on December 4. The issue is the perfect bicameralism that gives as much power to the Senate as the Chamber of Deputies.
The first US Presidential debate may not sway many voters but has lifted the Mexican peso. The peso, which has fallen by about 1.3% over the past two sessions, has stormed by 1.5% today as the seemingly biggest winner of the debate. Snap polls immediately following the debate gave the edge to Clinton.
The US dollar is narrowly mixed. The euro, yen and Swiss franc are higher, while the dollar-bloc and sterling are softer. The moving element here is not so much the greenback, which serving more as a fulcrum, but idiosyncratic, country-level developments.
EM initially benefitted from the FOMC decision, but softened into the weekend. One culprit was lower oil prices, as reports suggest an output deal is unlikely at the OPEC meeting this week in Algeria. However, it wasn’t just EM, as the greenback closed firmer against the majors as well. We still believe that risk and EM should do fine over the next few weeks, as the Fed set a two-month window of steady rates.
The major central banks have placed down their markers and have moved to stage left. There are the late-month high frequency data, which pose some headline risks in the week ahead. The focus for most investors will be on several political developments.
As Nassim Taleb instructed, we should not be fooled by randomness. If you see six red results in a row at a roulette table, do not conclude the game is rigged. If you flip a coin, and it is tails six consecutive times, the contest is not necessarily rigged.