<ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-september-non-farm-payrolls-263k-vs-250k-expected-20221007/“>US September non-farm payrolls +263K vs +250K expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/canada-september-employment-change-211k-vs-200k-expected-20221007/“>Canada September employment change +21.1K vs. +20.0K expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-williams-the-economy-has-shown-extraordinary-strength-post-pandemic-20221007/“>Fed’s Williams: The economy has shown extraordinary strength post-pandemic</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/atlanta-fed-gdpnow-estimate-for-3q-growth-rises-to-29-from-27-20221007/“>Atlanta Fed GDPNow estimate for 3Q growth rises to 2.9% from 2.7%</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-nagel-the-next-ecb-meetings-must-send-out-clear-signals-on-reacting-to-inflation-20221007/“>ECB’s Nagel: The next ECB meetings must send out clear signals on reacting to inflation</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/baker-hughes-oil-rigs-down-2-to-602-in-the-current-week-20221007/“>Baker Hughes oil rigs down -2 to 602 in the current week.</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/scholz-everyone-knows-that-energy-bailout-packages-are-necessary-and-coming-everywhere-20221007/“>Scholz: Everyone knows that energy bailout packages are necessary and coming everywhere</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-august-wholesale-sales-01-vs-04-expected-20221007/“>US August wholesale sales +0.1% vs +0.4% expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/snbs-jordan-swiss-inflation-above-3-is-clearly-too-high-20221007/“>SNB’s Jordan: Swiss inflation above 3% is ‚clearly too high'</a></li></ul><p>Markets:</p><ul><li>Gold down $16 to $1695</li><li>US 10-year yields up 6 bps to 3.88%</li><li>WTI crude up $4.06 to $92.51</li><li>S&P 500 down 115 points to 3629</li><li>USD leads, NZD lags</li></ul><p>The Fed-pivot talk went down in flames today and it didn’t even take a big surprise in the jobs report. The headline was basically bang-on expectations but unemployment fell two ticks to 2.5% with half of that from a dip in labor force participation.</p><p>Beyond that the details didn’t matter and I have to think that the weight of all the hawkish Fed talk this week added to the tumble. The dollar rose on the data and then rose again late in the day as equities crumbled. The Nasdaq fell 4% to nearly give up the week’s gains.</p><p>Cable fell nearly a full cent to 1.1063 from as high as 1.1225 before the jobs report. It’s trading at the lows just ahead of the close.</p><p>AUD and NZD are similar while EUR/USD is just above the knee-jerk lows after the jobs data. The real worry going into Monday’s open may be USD/JPY as it presses to 145.40 and test’s the Japanese Ministry of Finance’s patience. </p><p>USD/CAD was able to hold the earlier highs on a sizzling day for oil. Crude has swung from demand worries to supply fears and rallied every day this week. Mission accomplished for OPEC+ and the moves will make the BOC’s job a bit easier.</p><p>All told, this was a rough day for risk assets and a strong start to Q4 has turned into a dud.</p>

This article was written by Adam Button at forexlive.com.

<p>Closing changes for the main US markets:</p><ul><li>S&P 500 down 104 points to 3639 or -2.9%</li><li>Nasdaq Comp -3.8%</li><li>Russell 2000 -3.2%</li><li>DJIA -2.1%</li><li>Toronto TSX Comp -2.35%</li></ul><p>On the week:</p><ul><li>S&P 500 +1.4%</li><li>Nasdaq Comp +0.5%</li><li>Russell 2000 +1.9%</li><li>Toronto TSX Comp +0.4%</li></ul><p>That SPX candle was looking really nice earlier this week. Meanwhile, WTI crude finished the week up 17%.</p>

This article was written by Adam Button at forexlive.com.

<p>The trade in the first half of the year was to sell stocks and buy oil. </p><p>That’s shaping up to be the trade of Q4 as well. WTI crude oil are up 5% today and briefly touched $93.00, which is the highest since August 30. It’s also come on a day with a strong US dollar and a brutal decline in equities.</p><p>Energy could be a big problem for the global economy next year. There are people talking about the potential for a second wave of inflation on renewed strength in oil and gas.</p><p>I don’t think that that’s a big risk. Oil and gas alone in a soft economy aren’t going to stoke inflation. Even if commodity strength extends to metals and softs it won’t offset weakness in things like housing and manufactured goods.</p><p>In any case, what’s the trade for oil next?</p><p>It’s turned around on a fundamental surprise — OPEC+ cutting 2 million barrels per day from quotas and around 1mbpd in real production. Moreover, that move sets a floor under oil prices and sends a signal that they mean business.</p><p>Up until last week, the trade was demand destruction but risks are growing of supply destruction from Russia and demand growth from China reopening. In addition, the SPR releases are coming to an end.</p><p>Technically, have a look at the weekly chart:</p><p>That’s a powerful three-candle reversal. What’s needed next is a decisive move about the series of lows in the $93-95 region.</p>

This article was written by Adam Button at forexlive.com.

<p>The selling in equities today is utterly merciless.</p><p>The combination of stridently-hawkish talk from Fed officials this week and a decently-strong non-farm payrolls report today has led to an abandonment of the ‚Fed pivot‘ trade.</p><p>The week had started out with a +5% gain but now the Nasdaq is barely in positive territory, up just 0.7%.</p><p>I can’t help but think that the inabilty to maintain even a modest rally from the June/Sept lows is a sign of a potential rout. I pity to think what will happen if next Thursday’s CPI report is hot.</p>

This article was written by Adam Button at forexlive.com.

<p>USD/JPY is up 20 pips today and trading at 145.30.</p><p>In all liklihood that will be the highest close in 20 years for USD/JPY and it’s the highest intraday trade since they intervened at 145.90.</p><p>The Ministry of Finance may be pressed to intervene again. The problem is that they’re fighting a fundamental battle. The US dollar is strengthening across the board in the aftermath of a strong non-farm payrolls report. The market is beginning to wonder if the Fed hiking to just under 5% will be enough to tame inflation.</p><p>The MOF has often pointed to ‚volatility‘ rather than absolute price levels in its jawboning and intervention. We’ve been around 144.00 now for a month so certainly the one-way moves have been tamed. </p><p>But if they allow the pair to move to new highs, I suspect the market will quickly test 150.00. Domestically, the economic calendar is very light for Japan next week.</p>

This article was written by Adam Button at forexlive.com.

<p>Yesterday, Bank of Canada governor Tiff Macklem <a target=“_blank“ href=“https://www.forexlive.com/centralbank/bocs-macklem-we-need-additional-info-before-we-consider-moving-to-more-balanced-policy-20221006/“ target=“_blank“>said </a>more data is needed before moving to shifting to an interest rate pause. Today he will get it, with Canadian jobs to be released alongside non-farm payrolls.</p><p>Unlike in the US, Canadian jobs have showed a material deterioration in the past few months. The data is notoriously volatile but there have been three months in a row of losses near 40K. For those who follow the US, a rule of thumb is to multiply by 10, so this would be the equivalent of three months in a row of non-farm payrolls of -400K.</p><p>The consensus today is +20.0K.</p><p>The unemployment rate has ticked up to 5.4% from 4.9% and is expected to stay there.</p><p>As always, the breakdown of full-time and part-time jobs is an important consideration for Canada. Last month there were 77..2K full time job losses, which was the worst since January.</p><p>The Canadian dollar has recently broken down to the lowest levels since May 2020 and the next leg depends on what the BOC does next. A quick pivot is unlikely as Macklem said yesterday that more rate hikes „will be needed“ and market pricing for a 50 bps hike on Oct 26 is 98%, which would take rates to 3.75%.</p><p>From there, a likely path is for the BOC to slow to 25 bps and then pause at year end. A big surprise in today’s jobs report could change the equation but if you’re trading USD/CAD, it will be challenging with the US report due at the same time.</p>

This article was written by Adam Button at forexlive.com.

<p>It’s an earlier than usual finish for me today, so I’ll leave you with the <a target=“_blank“ href=“https://newsquawk.com/daily/article/?id=2673-us-market-open-tentative-trade-awaiting-nfp-and-fed-speak-for-fresh-pivot-guidance&utm_source=newsquawk&utm_medium=email&utm_campaign=newsletter&utm_content=us-open“ target=“_blank“ rel=“nofollow“>Newsquawk US Market Open Preview</a> and wish you all an amazing weekend.</p><p>Summary</p><p>European bourses are modestly on the backfoot, though have trimmed this slightly as the session progresses, in limited newsflow pre-NFP.</p><p>Stateside, futures are similarly contained and lie either side of the unchanged mark with NQ -0.1% modestly lagging amid yield upside</p><p>Typically tense pre-NFP trade has seen the DXY briefly dip below 112.00, to a 111.94 low, before regathering itself and holding marginally above the figure.</p><p>Core benchmarks dipped to lows amid the morning’s German data release, with Import Prices lifting again, though have gained some poise since in quiet trade.</p><p>WTI and Brent are off highs but still holding onto gains of around USD 0.50/bbl and are at the top-end of the week’s USD 86.35/bbl – 95.00/bbl parameter in Brent Dec’22.</p><p>Fed’s Mester (2022/2024) and Waller (voter) spoke overnight and added to the pivot-pushback</p><p>Looking ahead, highlights include US & Canadian jobs reports, BoE’s Ramsden, Fed’s Williams, Kashkari, Bostic</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/boe-will-consider-whether-market-assessment-of-uk-economic-policy-has-changed-20221007/“>BoE will consider whether market assessment of UK economic policy has changed</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/bofa-flow-show-bull-bear-indicator-remains-at-00-extreme-bearish-20221007/“>BofA Flow Show: Bull & Bear indicator remains at 0.0 (Extreme Bearish)</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/the-natgasweatherandrepaltry-natgasweather-daily-report-20221007/“>The @NatGasWeather/@andrepaltry NatGasWeather Daily Report</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/euro-zone-demand-surge-playing-increasing-role-in-excessive-inflation-ecb-20221007/“>Euro zone demand surge playing increasing role in excessive inflation: ECB</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/the-newsquawk-nfp-preview-looking-for-250k-payroll-additions-vs-315k-in-august-20221007/“>The @Newsquawk NFP Preview: Looking for 250k payroll additions (vs 315k in August)</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/japan-currency-diplomat-never-felt-a-limit-to-ammunition-for-currency-intervention-20221007/“>Japan Currency Diplomat: Never Felt A Limit To Ammunition For Currency Intervention</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/italy-retail-sales-fall-04-mm-in-august-20221007/“>Italy retail sales fall 0.4% m/m in August</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/french-trade-balance-1530b-forecast-14425b-previous-1454b-20221007/“>French Trade Balance: -15.30B (Forecast -14.425B, Previous -14.54B)</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/uk-halifax-house-prices-mom-01-previous-04-20221007/“>UK Halifax House Prices MoM: -0.1% (Previous 0.4%)</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/german-real-retail-sales-mom-13-forecast-12-previous-19-20221007/“>German Real Retail Sales MoM: -1.3% (Forecast -1.2%, Previous 1.9%)</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/german-industrial-production-mom-08-forecast-05-previous-03-20221007/“>German Industrial Production MoM: -0.8% (Forecast -0.5%, Previous -0.3%)</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/the-newsquawk-market-open-sentiment-sullied-as-fed-officials-push-back-on-incoming-pivot-20221007/“>The @Newsquawk Market Open: Sentiment sullied as Fed officials push back on incoming pivot</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/swiss-unemployment-rate-adjusted-21-forecast-21-previous-21-20221007/“>Swiss Unemployment Rate Adjusted: 2.1% (Forecast 2.1%, Previous 2.1%)</a></li></ul>

This article was written by Ryan Paisey at forexlive.com.

<p>BoE will consider whether market assessment of UK economic policy has changed, says Ramsden</p><p>“One key consideration for the (BoE’s monetary policy committee) at its upcoming meetings will be whether the recent repricing of UK assets reflects a changed assessment by markets of the UK macroeconomic policy mix between fiscal and monetary policy,“ Ramsden said in a speech to the Securities Industry Conference 2022.</p><p><a target=“_blank“ href=“https://twitter.com/PriapusIQ/status/1578337433439338502?s=20&t=1RQFCJsRY74tUsB-8qcRwQ“ target=“_blank“ rel=“nofollow“>Full Reuters Note on this</a></p>

This article was written by Ryan Paisey at forexlive.com.

<p>BofA Flow Show: Bull & Bear indicator remains at 0.0 (Extreme Bearish) </p><p>Equities (USD) </p><p>US: outflows recommence, 3.4bln </p><p>Europe: outflow for the past 34 weeks, 0.6bln </p><p>Japan: inflows for the past two weeks, 1.5bln </p><p>Fixed Income (USD) </p><p>Gov’t/Tsy: inflows for the past seven weeks, 4.2bln </p><p>IG: outflows for the past five weeks, 12.5bln </p><p>HY: inflows for the past seven weeks, 0.6bln </p><p>Source: BofA</p>

This article was written by Ryan Paisey at forexlive.com.

<p>The guys at NatGasWeather.com have once again allowed me to share with you their daily report </p><p><a target=“_blank“ href=“https://natgasweather.com/wp-content/uploads/2022/10/NatGasWeather.com__Daily__Report_Oct__7.pdf“ target=“_blank“ rel=“nofollow“>Full Report Here</a></p><p>7-Day Weather Summary (Oct 7-13): An early season cool shot will sweep across the Great Lakes, Ohio Valley, and Northeast Fri-Sun w/showers and chilly lows of upper 20s to 40s. The rest of the US will be comfortable w/highs of 60s to 80s besides hotter 90s California and Southwest deserts. </p><p>Much of the US will again be comfortable next week as highs of 60s to 80s rules besides cooler 50s N. Rockies & N. Plains.</p><p>Overall, moderate national demand Fri-Sun, then light.</p>

This article was written by Ryan Paisey at forexlive.com.