US Dollar: Uptrend intact as NFP looms – BBH
Brown Brothers Harriman’s Elias Haddad notes the recent US Dollar rally and bond selloff have stalled as FOMC officials temper expectations for an October rate hike.
The US Dollar's uptrend has persisted despite expectations of a rate hike from the FOMC following a hot August CPI and a September Fed hike. Resilient US economic activity, improving labor demand, and persistent inflation are fueling this trend ahead of the September Nonfarm Payrolls (NFP) report. FOMC officials' recent comments have dampened the expectation of back-to-back hikes in October.
The Atlanta Federal Reserve's GDPNow model projects Q3 real GDP growth at 3.7% annualized, up from 2.2% in Q2. September NFP is anticipated to show gains of +90k versus +162k in August, with Bloomberg's whisper number at +84k and ADP private payrolls and Revelio Labs employment indicating gains of +67K. Fed Funds futures suggest 75 basis points of hikes over the coming year.
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