The spotlight this afternoon will be placed on the U.S. nonfarm payrolls report for the month of September. Economists are forecasting the labor market in the world’s largest economy to decline 5,000 after employment tumbled 54,000 in August. Today’s report is crucial for the U.S. economy as concerns of additional QE measures continue to affect the dollars strength to the detriment.
The labor market is struggling at the moment and has added weight to the case for additional free dollars on the market. As the global reserve currency a lot of countries welcome some dollar weakness as it makes their imports cheaper in the short term, on the flip side of the coin, commodities usually catch up with a devaluing dollar in the longer term.
Elsewhere the Euro is still looking strong despite weaker data from the fringe nations. It’s the German economy that’s lifting the Euros value and as long as they guarantee every nations sovereign debt and continue to show solid growth themselves this is likely to continue.
In the UK British manufacturers’ raw materials costs were reported to have risen almost twice as fast as expected last month, taking the annual rate well above expectations as higher cereals prices continued to feed through.
Factory gate inflation eased by less than expected this in September, which will disappoint Bank of England policymakers at a time when consumer price inflation is still running more than a full percentage point above its 2 percent target. The PPi figure does compound on the CPI figure and they are both key to policy makers decisions when it comes to fixing interest rates.
