USD: Data this week implies downside risks – ING

China’s steps to support the housing and stock market have led to a rush to buy Chinese stocks this morning, ahead of the National Day 1-7 October holiday. The CSI index is up 7%, the Hang Seng 3% – and that is translating into stronger China-proxy Aussie and Kiwi dollars, along with a generally soft USD as safe-haven demand wanes, ING’s FX strategist Francesco Pesole notes.

Debates may influence the outcome of presidential elections

“Looking at this week’s busy US calendar, we’ll start tomorrow with the key JOLTS jobs openings, which surprised on the downside last month, followed by ISM manufacturing, which should keep hovering around the 47-48 level. Regional surveys also point to small changes in the ISM services index (Thursday), which remains in expansionary territory.”

“The biggest binary event will be Friday’s jobs report. Our economist expects a softer payroll read (115k) relative to consensus (146k) and also an increase in the unemployment rate to 4.3% against expectations for a flattening at 4.2%. The greater focus of the Federal Reserve on the employment side of its mandate means high sensitivity of the market to the details of the release.”  

“One more event to keep an eye on is tomorrow’s TV debate of the two US vice-presidential candidates JD Vance and Tim Waltz. This is the last chance for either campaign to attract voters in a debate as Donald Trump has ruled out another face-off with Kamala Harris. Incidentally, both Vance and Waltz have had a rather important role in their respective campaigns, so polls will be monitored closely later this week to gauge any impact, especially on Midwestern swing states. “