Payrolls Ahead
The euro began Friday on a soft note due to the adverse reaction to yesterday’s ECB decision. Growth downgrades were always expected, but the discussions over potential negative deposit rate perhaps came earlier than expected and the prospect of additional ‘conventional’ easing seems more adept at generating a ‘risk on, euro off’ kind of a move. Nonetheless, by Draghi’s own admission the mechanics of such a move are still being studied, but markets are not taking chances. Nor do we think the risk is limited to the ECB. Ahead today, nonfarm payrolls will be the key release. We expect a +50k jobs print in November, down from 171k during the previous month. The unemployment rate is also expected to rise to 8.0%. Canadian labour market details are also out, and later in the session the U. of Michigan release and US consumer confidence are due. EURUSD traded 1.2956-1.2972 and USDJPY 82.37-82.56.
Click here to read the full report: UBS Morning Adviser Europe
UBS Investment Bank