(02 NOVEMBER 2018)DAILY MARKET BRIEF 1:Risk-reload will boost Euro

Over the past few months, it seems that employment-growth has lost its importance, as the equity sell-off and stronger US yields encourage investors to take a more balanced allocation. Today’s announcement of non-farm-payrolls (NFPs) will be no exception, as investors continue to reload on risk. In the longer-term, we maintain our long EUR view.

The greenback spent most of October rallying, with the dollar index rising more than 2% from 95.13 to 97.12. Even though US economic came in soft, global risk-off sentiment encouraged investors to maintain long USD bias. Data were even disappointing: August’s final Durable Goods Orders came in at 4.4% monthly, down from 4.6% in the previous month. The measure bounced back in September, up 0.8% versus a -1.5% median forecast. September’s NFPs printed well below median forecast (134,000 versus 185,000 expected), while inflation eased to 2.33% annually from 2.7% in August. Retail sales tumbled in September, but an upside surprise in GDP, 3.5% versus 3.3% expected, cheered investors.