Strong US Employment
- US nonfarm payrolls rose by 165,000 in October, well above expectations for a 70,000 gain, while revisions added a further 84,000 jobs across August and September.
- Treasury yields rose on the stronger data, with the 2yr up 4bps to 4.51% and the 10yr up 2bps to 4.86%. The result adds to evidence that the FOMC cannot afford to be complacent about demand-pull inflation, with markets pricing around an 80% chance of a December hike.
- This week’s October CPI report is now in focus for any evidence that underlying inflation pressures are broadening.
- Oil fell sharply last week on reports that US-Iran negotiations were progressing and that Tehran had shown a willingness to negotiate over its nuclear programme. Brent fell more than 16% over the week to US$98/bbl, while WTI lost 13.2% to US$90/bbl.
- In Australia, Assistant Governor Hunter speaks at the UBS conference this morning on the effects of AI on the economy and its implications for monetary policy, while the NAB business survey and consumer confidence are due this week.
