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The USD/JPY pair trades with mild losses near 152.75 during the early Asian session on Tuesday. Nonetheless, the potential downside might be limited by optimism over a potential US-China trade deal. Traders will closely monitor the Federal Reserve (Fed) interest rate decision later on Wednesday.

Introduction to USDCAD The USD/CAD currency pair, often called the “Loonie,” represents the exchange rate between the United States Dollar and the Canadian Dollar. It is one of the most heavily traded pairs globally, closely linked to commodity markets, especially oil, due to Canada’s extensive resource sector. Traders frequently watch this pair to gauge economic […]

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JPMorgan and Goldman estimate jobless claims fell to ~217k despite data gaps from the shutdown.

• Both layoffs and hiring remain subdued, keeping the labour market stable but stagnant.

• Small-business hiring continues to slow, according to Bank of America data.

• Continuing claims are steady near 1.9 m, consistent with a 4.3% jobless rate.

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Info via Reuters reporting.

JPMorgan and Goldman Sachs estimate that U.S. weekly jobless claims declined to 217,000 in the week ending October 11, down from 235,000 a week earlier, suggesting that layoffs remain limited even as hiring slows.

The estimates were compiled using partial state data because the ongoing U.S. government shutdown, now in its third week, has halted official data releases. Economists used historical seasonal adjustments to approximate missing figures from several states, including Arizona, Massachusetts, Nevada, and Tennessee.

Goldman said its model produced a range between 211,000 and 225,000, depending on assumptions for the unavailable states, while JPMorgan’s Abiel Reinhart noted that the figures “look quite decent,” indicating continued labour-market stability.

Economists describe the current backdrop as a “no-hire, no-fire” environment: job losses are minimal, but new hiring is also limited. A Bank of America Institute survey found that small-business hiring activity has slowed, with fewer new business applications listing planned wages — a sign of weakening job creation.

Continuing claims, which track people still receiving unemployment benefits, were estimated at roughly 1.9 million, little changed from the previous week. The unemployment rate, last reported at 4.3%, remains near a four-year high.

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• Trump cranks up the anti-China rhetoric again
• USTR's Greer: China realizes it over-stepped
• Fed chair Powell: Future path of monetary policy driven by data and risk assessments
• Powell Q&A:A risk that slow pass-through of tariff start to look like persistent inflation
• More from Powell: Further declines in job openings might start to show up in employment
• IMF boosts 2025 global GDP forecast to 3.2% from 3.0%
• Lagarde says she cannot say how high the bar is for cutting rates further
• BOE's Bailey: Today's labour market data back my view of softening
• Fed's Collins: It seems 'prudent' to cut rates further
• Li says China aims to “continuously form new growth points for expanding domestic demand,”
• Fed's Bowman says she continues to see two rate cuts before year end
• US ambassador to NATO says a big Ukraine weapons announcement coming tomorrow
• Canada August building permits -1.2% vs +0.2% expected

Markets:

• Gold up $32 to $4142
• US 10-year yields down 2.3 bps to 4.02%
• WTI crude down $1.03 to $58.47
• S&P 500 down 0.2%
• JPY leads, AUD lags

It was a lively day.

Stock futures were down badly ahead of the open and sank even harder afterwards before finding strong support at Friday's low. That's where the rally started and it might have had something to do with CNBC announcing that US Trade Rep Greer would be on TV. The thinking was that he would be softening the US's position and that's exactly what he did as he said China realized it over-stepped. He floated some other positive points too and that added to the rebound, eventually taking stocks to strongly positive territory. The Russell 2000 hit a record, climbing more than 2%, in part due to strong earnings from Wells Fargo.

Of course, Trump tossed another hand grenade late, hinting at more retaliation against China for not buying US soybeans and starting a fight over cooking oil. That led to some rapid selling and somewhat of a soft close.

Powell, Bailey and Lagarde all spoke in a rare trio of top central bankers. None offered anything particularly market moving or insightful but it fill the gap left by the absence of US economic data. All of them were relatively upbeat on growth and Lagarde highlighted surprising resilience and that was exactly what we saw in the IMF forecasts, which were generally better than July, particularly for Japan.

Canada was an outlier as the IMF downgraded its forecast for this year and next by 0.4 pp each. That was underscored by a poor building permits report today and a downward revision. Despite that, the loonie was one of the strongest performers today as we await (expect?) some positive US-Canada trade headlines on aluminum, steel, energy and maybe more.