Morning Brew November 4 2022

Good Morning

US Indexes had the fourth negative day in a row as yields rose and the Dow lost 0.46%, the S&P 500 1.06% and the Nasdaq 1.73%.

Hopes of a slowing labor market helped yields fall back to 4.1 from 4.2 in the US 10 year and let the USD give up some of it`s earlier stronger gains.

The BoE delivered the expected 75 BPS hike but sounded more dovish than Mr Powell causing the expected rate differential between the USD and the GBP at peak rates to widen and this drove the exchange rate between the two lower by app 2%.

The USD Index rose to above 112, EURUSD is trading at 0.9780, the yen at 147.80, GBPUSD at 1.1230.

Gold and Silver lost strongly yesterday but could recover the losses and are now at 1648 and 19.70.

The Nonfarm Payroll will be the most important data point today at 13:30, expected at a moderate 200k, the lowest in two years. The unemployment rate is seen 0.1% higher at 3.6% and salary increases at a moderate 0.3%.

Before that, German Industrial Orders, French, Italian German EU and UK PMI data will be released.

This morning the market is trying to defy negative implusles, let us see if that holds.

Headlines:

• Hopes that China may ease Covid restrictions spark optimism in Asia
• German Chancellor Scholz visits China,
• Twitter is expected to communicate staff cuts
• G7 agree on fixed price for Russian oil

Economic data:

Friday; EU PMI, US Nonfarm Payrolls