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A typical pre-US Non-Farm Payrolls caution trading prevailed in Friday’s Asian session, leaving most majors in thin trading ranges. However, the Antipodeans outperformed and continued to benefit from the recent broad USD declines, in the wake of poor US fundamentals-driven increased US recession fears. Asian equities traded mixed while Treasury yields attempted a rebound but failed to fuel a recovery in USD/JPY. The losses in the US equity futures kept the bearish tone intact in the spot.

Meanwhile, the AUD/USD pair hovered near three-week highs of 0.6760, having ignored downbeat Australian Retail Sales data and RBA’s Financial Stability Review report. The Kiwi emerged the top gainer and traded well bid above the 0.63 handle amid higher oil prices. Gold prices, on the other hand, consolidated Thursday’s solid comeback in the lead up to the key US jobs data.

Heading into the European open, both the Cable and EUR/USD traded modestly flat, with the recovery mode intact, as the focus shifts to the Brexit updates and ECB-speak for fresh impetus.

Main Topics in Asia

Few more allegations on the US Pres. Trump through WSJ, WaPo

Up To 30 Labour rebels could back Boris Johnson’s new Brexit deal – Sun

Federal Reserve’s Vice Chair Richard Clarida: Economic growth is solid

Trump told President Xi he would stay quiet on Hong Kong amid trade talks – CNN

EU tells Boris Johnson “You have one week to make a better offer” – Times

White House trade adviser Navarro: Will be no small deal with China

Japan’s Aso: No immediate need for stimulus measures

Aussie retail sales miss expectations and Financial Stability Review  arrives

Japan’s Nishimura: There are worries sales tax hike may weigh on consumer sentiment

China will not interfere in the internal affairs of the US – Global Times

Fitch: Further easing measures from BOJ cannot be ruled

White House letter dares Pelosi to hold vote on impeachment – Axios

RBA’s Ellis: Australia’s manufacturing sector performing strongly with their exports increasing

UK business morale slides, especially in manufacturing – BCC

Key Focus Ahead

After a data-busy EUR calendar so far this week, Friday’s docket remains a thin-showing, with the only German Construction PMI (due at 0730 GMT) of some relevance and hence, the focus will be on the European Central Bank (ECB) Vice President De Guindos speech at 1125 GMT. Meanwhile, the incoming Brexit-related headlines will continue to keep the EUR, GBP traders busy.

The NA session offers plenty of event risks, especially with the September month US Non-Farm Payroll data on the cards at 1230 GMT. The US Labor market report will determine Fed’s next interest rates move, having a major impact on the greenback. Parallelly, the US Trade report and Fed’s Rosengren’s speech will be also published while the CAD traders will watch out for the Canadian Trade Balance and Ivey Purchasing Managers’ Index data. Also, in focus will remain the Baker Hughes US Oil Rig Count numbers for fresh oil trades.

In the American afternoon, the speeches by the Fed Chair Powell and policymaker Brainard will be closely eyed. Powell is due to deliver the opening remarks at a Fed Listens event which also includes Brainard, George and Quarles.

EUR/USD: Bull cross confirmed, Fed rate cut odds rise ahead of US NFP

EUR/USD’s hourly chart is flashing a golden crossover.  Rising odds of an October Fed rate cut  are weighing over the US Dollar.  The next big move in EUR/USD largely depends on the US Payrolls data due at 12:30 GMT.  

GBP/USD extends recovery ahead of US NFP, Fed’s Powell

GBP/USD pays little heed to the Brexit uncertainty amid overall weakness of the USD. Markets turn pessimistic ahead of the US jobs data considering the latest forward-looking indicators. Powell’s speech to also grab some attention later on Friday.

US Non-Farm Payrolls Preview: Gathered clouds

September payrolls expected to rise modestly. Manufacturing slowdown may be weighing on larger service sector. ADP September hires of 135,000 at trend.