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Today's markets analysis on behalf of Thadeu Dos Santos, Regional Director at Infinox
(MENAFN- MENAFNEditorial) Kindly find " Today's markets analysis on behalf of Thadeu Dos Santos, Regional Director at Infinox
The US dollar rose on Wednesday to trade near multi-month highs, reaching its strongest level against the euro since mid-May 2025. The advance has come alongside higher Treasury yields led by longer maturities.
While markets currently assign around a 20% probability to an October hike, down from nearly 40% last week, tightening is still expected later on. The market repriced following a weak September jobs report. Nonfarm payrolls increased by 29,000, well short of the 90,000 expected, while the unemployment rate rose to 4.2 .
Other indicators, however, paint a firmer picture. Employment components in both the ISM manufacturing and services surveys expanded, while ADP's weekly estimate of 23,750 private-sector jobs through September 19 was its strongest in three months. This mixed picture leaves a December interest rate increase priced in and expectations of further tightening into mid-2027 intact, keeping short-term yields elevated.
At the long end of the curve, yields remain near multi-decade highs amid growing concern over the US fiscal outlook, with total federal debt now exceeding USD 40 trillion. Washington is facing around USD 1 trillion annually on interest paym nts.
Weakness in the euro is providing an additional tailwind for the dollar. The single currency retreated as persistent fiscal concerns and political uncertainty in France leave the euro vulnerable to renewed selling pressure.
Today's Fed minutes release could provide the next catalyst. With an October move largely priced out, evidence of broad support for further hikes could rebuild short-end yields and extend the dollar's gains. A cautious record might reverse them. Thursday's jobless claims will provide another indication of whether labour-market weakness is broadening.
The US dollar rose on Wednesday to trade near multi-month highs, reaching its strongest level against the euro since mid-May 2025. The advance has come alongside higher Treasury yields led by longer maturities.
While markets currently assign around a 20% probability to an October hike, down from nearly 40% last week, tightening is still expected later on. The market repriced following a weak September jobs report. Nonfarm payrolls increased by 29,000, well short of the 90,000 expected, while the unemployment rate rose to 4.2 .
Other indicators, however, paint a firmer picture. Employment components in both the ISM manufacturing and services surveys expanded, while ADP's weekly estimate of 23,750 private-sector jobs through September 19 was its strongest in three months. This mixed picture leaves a December interest rate increase priced in and expectations of further tightening into mid-2027 intact, keeping short-term yields elevated.
At the long end of the curve, yields remain near multi-decade highs amid growing concern over the US fiscal outlook, with total federal debt now exceeding USD 40 trillion. Washington is facing around USD 1 trillion annually on interest paym nts.
Weakness in the euro is providing an additional tailwind for the dollar. The single currency retreated as persistent fiscal concerns and political uncertainty in France leave the euro vulnerable to renewed selling pressure.
Today's Fed minutes release could provide the next catalyst. With an October move largely priced out, evidence of broad support for further hikes could rebuild short-end yields and extend the dollar's gains. A cautious record might reverse them. Thursday's jobless claims will provide another indication of whether labour-market weakness is broadening.
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