U.S. Dollar Index Futures Prices Weaken ahead of Jobs Report

September 1, 2016 7:03AM CDT

U.S. Dollar index futures prices are slowing down ahead of Friday’s August Employment Report in the U.S., which is eagerly awaited by much of the commodities futures markets.

The December contract in U.S. Dollar index futures was down .35 percent at 95.63, after reaching a three-week high earlier in the week. Analysts attribute the earlier climb to the belief that the Federal Reserve is a lot closer to raising rates than previously anticipated. Commodities futures market participants are somewhat confident about a 25-bps rate hike by December this year, but are skeptical of the Fed hiking rates at its late September meeting.

U.S. Dollar index futures prices are also weaker as commodities futures traders stay on the sidelines ahead of Friday’s report, which is expected to show the U.S. economy added 180,000 jobs during the month.

Meanwhile, commodities futures markets participants had a slew of data to comprehend on Thursday.

Unit Labor Costs, the price of labor per single unit of output, increased at a 4.3 percent annual rate compared to expectations of that unit labor costs would be revised up to a 2.1 percent rate, according to the U.S. Department of Labor.

Productivity, which measures hourly output per worker, dropped at a 0.6 percent annual rate instead of the 0.5 percent pace of decline reported last month. It was the third consecutive quarterly drop. Productivity fell at a 0.6 percent rate in the first quarter.

Construction Spending in July was flat, slightly below estimates of a rise of 1 percent, according to the U.S. Department of Commerce.

The Institute for Supply Management (ISM) report for August was 49.4, compared to analysts’ expectations of 52. It was the first contraction since February. An ISM reading above 50 indicates expansion in the manufacturing sector and a reading below 50 indicates contraction.

Lastly, a number that is not regarded as major by commodities futures markets, in lieu of the rest of the economic calendar, Weekly Unemployment Claims increased 2,000 to 263,000 for the week ended Aug. 27, according the Labor Department.

Auto and Truck Sales for the month of August are expected to be released this afternoon, and are expected to fall as consumer demand slows.

Meanwhile, commodities futures markets remain quiet on the first day of trading for the month of September, and ahead of tomorrow’s report.

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