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US NFP should be improved - Westpac

FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, notes that the bank expects 185k in the US NFP later today, on the assumption that job creation this year has run ahead of GDP growth and is thus due to ease back.

Key Quotes

Hong Kong markets are due to reopen and should do so on time despite the street protests growing over the two day holidays. Mainland China markets remain closed and Korea is also closed. Despite the holiday, China’s Sep non-manufacturing PMI is due at 11am Syd/9am local. This is a low profile survey but for what it’s worth, Aug was 54.4.

At 10am Syd/8am Sing/HK, St. Louis Fed president Fed speaks on the economy and monetary policy. Last week he suggested that the Oct meeting would be the natural time to drop the “considerable period” language from the FOMC statement and saw late Q1 2015 as a likely time to hike rates.

After the large downside miss on headline payrolls in Aug (142k versus 230k expected), consensus looks for a resumption of >200k job creation. The median forecast is 215k, with the +/-1 standard deviation range of 195k to 237k. At the very least, the headline should be improved by the rehiring of 17k workers at a New England retailer. Westpac is on 185k, on the assumption that job creation this year has run ahead of GDP growth and is thus due to ease back. The potential for revision to Aug’s surprise adds to the usual headline risk. In the separate household survey, consensus is for the unemployment rate to remain at 6.1%; Westpac looks for 6.2%.

Also due in the US are the Aug trade balance, with the deficit seen about steady, near -$41bn and the Sep non-manufacturing ISM. This is expected to soften slightly, to a still strong 58.5, from 59.6.

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