Traders on Monday priced about a 73% chance that the Federal Reserve raises interest rates in December, as a week of US labor data opens and midterm elections arrive on Tuesday. CNBC cited CME's FedWatch tool for the 73% figure. A Financial Times briefing on Yahoo Finance put the futures-implied chance near 75%, a little lower over the past week after a run of weak company results. Three Fed officials on Friday argued for further increases to fight inflation that is still high, in the first comments after last week's decision to leave the policy rate unchanged. That hold, a 10 to 2 vote, is in the 28 October economy note.
Forecasts for Friday's jobs report sit between 60,000 and 65,000
The Bureau of Labor Statistics releases the October employment report at 8:30 a.m. Eastern on Friday, 6 November. Business Standard said forecasters expect 65,000 jobs and an unemployment rate steady at 4.2%. A Bloomberg survey cited by the Financial Times expects 60,000 jobs, up from 29,000 in September, with unemployment also at 4.2%. Job openings for September are due Tuesday at 10:00 a.m., and Business Standard expects the count to tick higher. Weekly claims on Thursday are seen near the lowest levels in decades. A productivity report on Thursday is forecast to show a 2.6% gain in the third quarter, which would be the biggest in a year. The Federal Reserve publishes minutes of the 27 to 28 October meeting at 2:00 p.m. on Friday, and the Senior Loan Officer Opinion Survey is due Monday at 2:00 p.m. Sunday's 65,000 preview is in yesterday's jobs note.
Midterms land on Tuesday, and euro area inflation is due Wednesday
Polls close across the United States on Tuesday, 3 November. Traders are treating the result as a test for oil, inflation and the stalled CLARITY Act, which is covered in today's bitcoin note. Gold's bounce as oil eased is in the commodities update.
Economists polled by Reuters expect Wednesday's euro area inflation print to rise 0.1 point to 3.9%, after oil climbed about 15% in October to around $117 a barrel and gas prices jumped 39% to above 100 euros a megawatt hour. The Financial Times noted that figure covers 21 countries that use the euro. The European Central Bank left rates unchanged in October. The deposit rate is 2.5% after increases in June and September. President Christine Lagarde said the October meeting could have warranted a hike, and that the direction is clear if energy prices stay high. Third-quarter growth was 0.4%. Traders have fully priced a rise in the deposit rate to 2.75% by early February, with about a 64% chance the move comes at the 17 December meeting. Follow the week on the economy desk.