2016-11-04 11:08:40

Today, traders' attention will be focused on the US labor market data for October, which will become known today at 15:30 (GMT+3). It is expected that the number of jobs will increase by 175.000 in October against the rise of 156 000 in September. Unemployment rate will fall to a level of 4.9%. Strong data will increase probability of monetary policy tightening by the US Fed in December.

However, it is clear that the outcome of the presidential election next week may change the plans of the Fed to tighten monetary policy. According to the recent polls, Donald Trump is leading in Arizona and Texas – the two states with strong positions of the Republicans, and the gap between Trump and Clinton is rapidly narrowing, especially after the new FBI revelations of Clinton’s private electronic mailing.

According to futures for the Fed rate, probability of the rate hike in December is 71.5%. Expectations of higher rates increase attractiveness of the USD for investors. However, uncertainty about the outcome of the US presidential election puts pressure on the USD and the US stock market.

The index WSJ, which shows positions of the USD against a basket of 16 currencies, fell by 0.3% to 87.60 at the beginning of today's European session.

Meanwhile, the US economy indicates signs of recovery. Last Friday the Commerce Department reported that in American GDP has grown by 2.9% on annual basis in Q3 against the forecast of + 2.5% with the adjustments for inflation and seasonal factors, which is the strongest result in the past 2 years.

When the markets will finally calm down after the election, US macro-economic statistics will regain its importance as the positive economic development will be the main factor providing strong support to the USD and the US stock market.

DJIA