US FX WRAP: CAD hit on dismal jobs report as risk events await

The Dollar Index was slightly firmer, albeit mixed against G10 FX peers, amid a lack of tier 1 US data this week, and no Fed speak on Friday. Next week, the risk events ramp up with US inflation data, retail sales, the beginning of earnings season, and Chair Warsh even giving remarks with the IMF next Thursday. Back to today, prelim UoM for October largely underwhelmed, while Middle Eastern updates were aplenty, but the weeks key highlight remains Trump saying he will not attack Iran before the midterms.

AUD, CHF, NZD, and GBP all saw gains to differing degrees, while EUR, JPY, and CAD saw losses with the latter the clear laggard. The Loonie was weighed on by a dismal Canadian jobs report, as the economy unexpectedly lost 68.3k jobs in September, against the expected 7k and prior months -41.7k. The unemployment rate ticked higher to 6.5% from 6.4%, although it was anticipated. Following the dataset, BoC pricing has trimmed from 10bps of implied tightening in October to around 6.5bps.

For the Euro, focus remains on two fronts: a) politics and b) EU-China trade relations. On the former, no material updates on the French fiscal situation. On the trade front, EU Trade Commissioner Sefcovic said that it had reached a shared understanding to improve access to the Chinese markets. He noted that the agreement of understanding with China on hybrid vehicles could cut shipments by half.