04 October 2023
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JOLTS suggests labour market staying hot

By Edward Bell

The August JOLTS report surprised on the upside with 9.61m job openings, up from 8.92m a month earlier and beating market expectations of a slowdown. Professional and business services were one of the largest sectors to report growth, along with insurance, manufacturing and education. The improvement in August helped to keep the ratio of job openings to unemployed steady at 1.5, much looser than levels of closer to 2 at the start of the year. The quits rate held flat at 2.3%.

The US House of Representatives voted to remove the speaker, Republican Kevin McCarthy after members of his own party voted against him as a consequence of his negotiation with Democrats to avoid a government shutdown. The funding bill agreed over the past weekend only funds the government until November 17, setting a deadline for when a new speaker will need to be named to coordinate the process of a longer lasting spending bill.

Inflation in Turkey accelerated to 61.5% y/y in September, up from 58.9% a month earlier, and rose 4.8% m/m. Core inflation rose by 68.9% y/y, highlighting the still strong underlying demand in Turkey’s economy and the pass through of a weaker Turkish lira into inflation dynamics. High energy costs will be an acute risk for inflation in Turkey in the coming months, entrenching high inflation across the basket beyond fuel prices. Turkey’s central bank meets at the end of October and has raised policy rates by 1,650bps since May.

India’s manufacturing PMI ticked modestly lower in September, sliding to 57.5 from 58.3 a month earlier. According to S&P Global, demand and output were higher last month while input prices were lower. Factory output prices, though, were higher which may keep a floor under inflation in India’s economy. The RBI is due to set policy at the end of this week with markets pricing in no change to policy.

Today’s Economic Data and Events

  • 11:15 SA S&P Global South Africa PMI Sep
  • 13:00 EC retail sales y/y Aug: forecast -1%
  • 16:15 US ADP employment change Sep: forecast 150k
  • 18:00 US factory orders Aug: forecast 0.3%
  • 18:00 US ISM services index Sep: forecast 53.5

Fixed Income

  • UST yields pushed higher again overnight, this time propelled by the stronger than expected JOLTS numbers which may show the labour market in the US not cooling as much as the Federal Reserve may want. Yields on the 2yr UST rose 5bps to 5.1502% while the 10yr UST yield added 12bps to 4.7955%. The bear steepening of the curve pulled higher again overnight by about 7bps to -36bps.
  • Benchmark bonds globally sold off overnight with bund yields up about 5bps at 2.964% and gilt yields adding 3bps to 4.595%.
  • Emerging market bonds took another leg lower overnight with the Bloomberg USD EM index down about 0.8%. GCC USD credit was weaker by almost 1% though sukuk markets held up relatively better.
  • Emirates NBD priced its USD 750m green bond at T+120.


  • The Japanese yen took the focus in FX markets yesterday after a rise to more than 150 against the USD sparked a massive move stronger. The yen strengthened from 150.16 to 147.43 before fading the gains and closing at 149.02, a drop of 0.6% for USDJPY. The ministry of finance declined to say whether or not it had intervened in currency markets last night to prop up the yen.
  • EURUSD and GBPUSD were both relatively quiet by the standards of recent days, holding close to recent lows.
  • Commodity currencies fared worse with AUDUSD dropping almost 1% for a second day running to close at 0.6302. The RBA held policy unchanged at its rate decision overnight. NZDUSD sank by 0.6% to 0.5909 while USDCAD added 0.2% to 1.3708.


  • A selloff in bond markets sent US equity indices lower on Tuesday. The Dow Jones declined 1.29%, the S&P 500 fell 1.37% and the NASDAQ dropped 1.87%.
  • European equity markets followed suit, with the Euro Stoxx 50, DAX and CAC 40 indices declining 1.02%, 1.06% and 1.01%, respectively on Tuesday. The FTSE 100 also declined on the day, falling 0.54. 
  • Locally, the ADX rose 0.63% and the DFM increased 0.45%.


  • Benchmark oil futures stabilized somewhat after a few days of losses with Brent futures up 0.2% at USD 90.92/b and WTI adding 0.5% to USD 89.32/b. OPEC+ holds its joint ministerial monitoring committee today but seems unlikely to endorse any change in production plans.
  • Data from the API reported a draw of 4.2m bbl last week in commercial crude stocks, offset by a 3.9m bbl in gasoline inventories and about 350k of distillate stockpiles. Data from the EIA will be released later this evening.
  • Gasoline and gasoil futures closed lower overnight while Henry Hub added 3.8%.
  • Gold prices extended their current losing streak, down 0.3% to USD 1,823/troy oz while both platinum and palladium ticked lower. Industrial metals were broadly negative with LME copper down 0.6% at USD 8,006.50/tonne.

Written By

Edward Bell Head of Market Economics

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