October U.S. Payrolls: Powering Through – TDS
01.11.2019, 15:11

October U.S. Payrolls: Powering Through – TDS

Analyst at TD Securities (TDS) provided their views on Friday's mostly upbeat US monthly jobs report, showing that the economy added 128K jobs in October.

  • "Nonfarm payrolls surprised notably to the upside, coming in at 128k for October. The trend in job growth remains robust at 156k during the last six months — more than enough to absorb new entrants to the labor force. This should lend support to the FOMC's message this week that "monetary policy is in a good place."
  • The strong payroll report should flatten the curve and keep Treasury yields somewhat elevated. Nevertheless, with global growth continuing to slow and the market waiting for confirmation that global growth weakness is not impacting the US consumer, rates should remain capped.
  • On the whole, this number is supportive for the USD. Against a backdrop where expectations for payrolls were already bleak (in part due to GM strike), positive revisions and firming wages do look encouraging in that context. Overall, this number helps to reaffirm the Fed's hawkish cut and extended pause. By extension, today's number should also help to reinforce our current biases - EURUSD looks toppish around 1.12 and USDCAD poised to trade higher with an eye towards 1.33 near-term (as the BOC flips more dovish while other central banks stand pat)."

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