Average hourly earnings increased three cents or 0.1 percent in August after a solid 0.3 percent rise in July.
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“It would lead people to the conclusion that the economy is continuing to grow at a moderate pace and to expect a December rate hike from the Fed rather than September”, said David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management in Washington.
“Should we get a strong jobs report for August, then the next FOMC decision in three weeks will absolutely be a live meeting, whether markets want to accept that or not”, Erlam said. This view has been echoed by other Fed board members. The jobs data at the end of the week will be assessed as to how it affects the prospects for tighter policy, and whether that could come as soon as the September meeting.
“So I don’t think we know at the time we start whether it’s one and done or several”.
The greenback gained against the yen to 103.39 yen, after hitting 103.53, its highest since July 29. Against a basket of the world’s six top currencies, it was up 0.1 percent .DXY as traders kept moves minor.
Expectations of low growth have become so embedded in corporate and investing behavior, he said, that even if inflation rises unexpectedly and the Fed has to raise rates faster than it now anticipates, a detrimental spike in long-term interest rates is unlikely.
Euro zone bond yields crept higher, with a Moody’s ratings review of Portugal and a second parliamentary vote of confidence in Spain in focus, in addition to the USA job data. An upbeat payrolls report would reinforce the view that a US rate hike may be on the cards, after Fed officials sounded a hawkish note at a meeting last weekend.
Traders saw about a 22 percent probability of a Fed rate increase this month, down from 34 percent before the report, and a 55 percent probability of a hike in 2016, down from 59 percent, according to futures data compiled by Bloomberg.
Evans, who does not have a vote on Fed policy this year, is known as one of the US central bank’s most outspoken doves, generally in favor of delaying rate rises as long as possible so as to encourage hiring and investment.
MSCI’s broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS ended barely changed, after spending the day swaying in and out of the red.
It consigned the region to third straight week of falls, whereas European markets were heading for a second week of gains.
The euro weakened to $1.1121, the lowest since August 10, before recovering to $1.1152. The greenback dropped 0.4 percent to $1.1240 per euro and declined 0.4 percent to 102.87 yen.
Sterling was also steady at $1.3271 GBP=D4 after jumping 1 percent overnight on purchasing managers’ index (PMI) data showing the British manufacturing sector staged one of its sharpest rebounds on record in August. US gold futures settled up 0.4 percent at $1,317.10. It touched its lowest since June 24 at $1,304.91 an ounce on Wednesday.
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Gold is highly sensitive to rising US interest rates which increase the opportunity cost of holding non-yielding bullion while boosting the dollar in which it is priced.
