PREVIOUS TRADING DAY EVENTS 05 Oct 2023

Jobless claims were reported again at low levels near 200K. The number rose moderately last week pointing to stilltight labour market conditions at the end of the third quarter. The U.S. economy has so far experienced high interest rate increases from the Federal Reserve to cool demand and lower inflation. Inflation indeed gets lower but this labour resilience raises the risk of the U.S. central bank hiking rates again by year end.

Demand in the economy continues to strengthen which can only serve to worry Fed officials even more, and puts the progress in bringing inflation down in jeopardy, said Christopher Rupkey, chief economist at FWDBONDS in New York.

Data suggest that the labour market is gradually cooling. The government reported on Tuesday that there were 1.51 job openings for every unemployed person in August and unfilled positions increased by the most in two years.

Most economists believe the central bank is done hiking rates. Since March 2022, it has raised its benchmark overnight interest rate by 525 basis points to the current 5.255.50 range.

Nonfarm payrolls likely increased by 170K jobs last month after rising 187K in August. The unemployment rate is forecast to dip to 3.7 from 3.8 in August.

We look for payrolls to remain firm in September, registering a 210,000 gain, said Oscar Munoz, chief U.S. macro strategist at TD Securities in New York.

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