USD Index Futures Hover as Jobs, Election Loom

November 3, 2016 6:47AM CDT

U.S. dollar index futures prices are dipping into lower territory as Friday’s October Employment Report looms and the nation’s tumultuous presidential election heads toward conclusion next Tuesday.

The December contract in U.S. dollar index futures was down .12 percent at 97.30 in mid-day commodities futures trading during a full day of economic data. The contract remains under pressure heading into the afternoon.

A number of economic reports hit the commodities futures markets on Thursday morning. Third-quarter non-farm productivity rose at a 3.1 percent annual rate, according to the U.S. Department of Labor. The increase comes after three straight quarters of decline and compares to economists’ expectation of a rise of 2 percent. Unit Labor Costs increased 0.3 percent, compared to expectations of 1.2 percent rise.

Weekly Jobless claims grew by 7,000 to 265,000 for the week ended Oct. 29, the highest level since early August, the Labor Department said on Thursday. Claims for the prior week were unrevised.

Factory Orders for September increased 0.3 percent, according to the U.S. Department of Commerce, in line with economists’ expectations.

The Institute for Supply Management non-manufacturing index fell to 54.8 in October from 57.1 in September. Economists expected it to hit 56 in October.

Yesterday’s FOMC meeting was considered a non-event in most commodities futures markets. With less than a week before the election, the Federal Reserve left interest rates unchanged and few surprises in the policy statement. The FOMC said job gains are solid, and it was recognized that the case for an interest rate increase is strengthening. However, the Fed needs further evidence of continued progress toward its objectives before raising rates.

Overseas, the Bank of England kept interest rates at 0.25 percent and England's High Court ruled on Thursday that the British government requires parliamentary approval for exiting the European Union.

Most commodities futures markets participants are turning their focus to the October Employment Report. Most economists expect the unemployment rate to remain unchanged at 5 percent and 180,000 jobs added to the U.S. economy in October.

Election news and surveys are dropping considerable weight on markets, with most reports showing volatile opinions about the outcome. However, many analysts say that signs that the election will be much closer than anticipated have unnerved commodities futures markets participants.

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