Falling home prices, slumping durable goods orders and a dive in the ISM index have set the stage for an appalling employment report Friday morning. Against this backdrop, a fall of only 100,000 jobs in September would be a victory. Markets must have a loss of at least 150,000 priced in, at this stage.
If this week is any indication, poor data probably won’t have much impact on the dollar as macro issues like the rapid slide into chaos of the European banking system and the continued deleveraging of the global economy overshadow even the usually all-important US employment report. The TARP package looks like it is losing its influence on the markets as dealers price in its inevitable passage.