The day began with a focus on China reopening but it's quickly shifted to the potential for a hawkish Fed decision tomorrow. That's led to a sharp turnaround in the US dollar across the board. The euro is now down 16 pips on the day to 0.9865 from a high of 0.9953 -- nearly a full cent. It's also the lowest in a week.
The trigger was the JOLTS report, which showed job openings jumping to 10.71 million from 10.05m. That reverses a recent decline and raises the risk of a tight jobs market for longer and the Fed needing to hike more.
JOLTS data is from September and is a lagging indicator to begin with. It overshadowed a surprise decline in the prices paid data in the ISM manufacturing index, which is more of a forward-looking report.
Normally, I think the reaction would have been more balanced but tomorrow is Fed day and given the recent rally in risk assets, the bulls are nervous. Powell will have to walk a fine line in terms of communication around hikes in December and beyond. I don't expect anything particularly clear so it will come back to data going forward, starting with ISM non-manufacturing on Thursday and non-farm payrolls on Friday.
