A soft report could undo the dollar narrative
The market is obsessed with the US jobs picture at the moment but it might have overlooked other signs of weakness in the US economy.
Retail sales and consumer confidence are falling and with supply bottlenecks mounting, that trend is going to continue.
Morgan Stanley today slashed its Q3 GDP tracking estimate to 2.9% today from 6.5% and there's no new giveback in Q4 with the forecast remaining at 6.7%.
The US had been seen as the clear leader in growth coming out of the pandemic but delta and consumer worries are weighing. In addition, supplementary jobless benefits run out next week so there could be more pain to come, particularly if tomorrow's non-farm payrolls data is soft.
Cable has made a quick move in the past few minutes but NZD/USD is particularly interesting as it looks like a major squeeze.
