All eyes on US job data ahead of Fed
FX markets will be looking to a swathe of US employment data today ahead of Wednesday’s Federal Reserve decision.
With the official October non-farm payrolls report cancelled and the November report delayed until 17 December – all due to the US government shutdown – financial markets have been forced to look at data previously seen as “second tier.”
Today’s JOLTS report – the job openings and labour turnover series – has been trending lower since its mid-2022 peak, which was the top of the global post-Covid employment market. The index has recently steadied. The October report is forecast at 7.1m openings after the August report found 7.2m openings (the September JOLTS report was cancelled due to the shutdown).
The new ADP weekly jobs report and the NFIB small business index numbers are also due.
The latest jobs data likely won’t impact this week’s Fed decision, but further bad news from the US labour market may make further cuts next year more likely – and could cause the USD to weaken further.
EUR: Range holds, but cracks show
Isabel Schnabel’s hawkish remarks early Monday did little to keep the euro bid – if anything, they weakened it – though they were enough for markets to price in about 30% chance of a hike by the end of 2026. Her words reverberated across markets, prompting a recalibration of global rate‑cutting cycles, including the Fed’s, on the perception that the ECB may have reached its floor. Ironically, this weighed on the euro, which remains more sensitive to Fed developments than to ECB signals.
That said, the broader ECB board has been vocal for months about the risks of inflation undershooting. And while Schnabel remains one of its most influential members, her stance increasingly looks like an outlier amid wider openness to further easing, depending on the inflation outlook. This raises doubts about the durability of the current global recalibration in rate‑cutting expectations.
EUR/USD traded range‑bound, with support at 1.1640/30 and resistance at 1.1670. Support was briefly breached to 1.1620 as a second line, driven by global hawkish repricing and, in our view, by pragmatic remarks from frontrunner Kevin Hassett in the race for the Fed chair. Known as the most dovish among the pool of candidates, Hassett was clear that it would be irresponsible to lay out a plan for where rates should go over the next six months, stressing instead the importance of relying on data. His remarks struck a tone of caution, data‑dependence, and prudence – certainly contrasting with the more unconditionally dovish tone typically associated with him.
We expect this range to hold today, with chances of testing secondary levels – north at 1.1680 or south at 1.1620 – depending on the JOLTS data outcome.
Meanwhile, Ukraine’s President Zelenskiy noted yesterday that divisions remain over eastern Ukrainian territory, with further discussion on several sensitive issues still required. The news likely dampened lingering hopes of imminent progress, truncating upside potential for the euro.
GBP: Sterling support at 1.33 looks shaky
GBP/USD rose over 1% since budget day. The move followed as the long end of the gilt yield curve was hollowed out of months-long accumulated risk premium. 1.33 appears as short-term support, though it looks fragile as tomorrow’s Fed meeting looms and is likely to send cable lower on hawkish remarks from Powell. Until then, we expect 1.33/1.3350 to hold as range-bound price action levels.
Yesterday, a private survey released by the Recruitment & Employment Confederation (REC), KPMG, and S&P Global showed that wage growth picked up in November, even amid a weak labour market, with pricing for a cut next week briefly dipping lower in response. Lingering wage growth pressure suggests inflation may prove stickier than many anticipate. The result would be a continuously divided MPC, on high alert, with bearish GBP pressure only partially expressed through rate differentials.
That said, hard data will have the final say. It won’t be until next week that the labour market and inflation reports are released, just days before the policy meeting itself. A softer November inflation print, adding to October’s below-expectation outcome, could perhaps convince the divided board toward a more unanimous dovish stance, allowing sterling to break south of 1.33 with greater sustainability.
Swissie on the back foot
Table: Currency trends, trading ranges and technical indicators
Key global risk events
Calendar: December 8-12
All times are in GMT
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
