Ahead Today
G3: US ISM manufacturing, eurozone CPI
Asia: Indonesia trade and CPI, RBI policy rate decision
Market Highlights
A range of US employment indicators for August suggests that job creation remained relatively steady, layoffs stayed low, but hiring momentum continued to ease. JOLTS job opening rose slightly to 7.23 million, from 7.21 million in July, with the job opening rate unchanged at 4.3%. However, the hiring rate slowed to 3.2%, the slowest pace since June 2024, indicating a slowdown in hiring activity. The quit rate ticked lower to 1.9% from 2%, potentially reflecting that people are less confident of finding jobs. Meanwhile, companies appear to be holding on to their staff, keeping layoff rate low at 1.1%. Separately, US consumer confidence fell to a 5-month low of 94.2 in September.
Markets will turn their attention to the US nonfarm payrolls report this Friday. Payroll gains have already slowed to a 3-month average of just 29,000 per month in August, Notably, the slowdown in hiring points to softer payrolls growth, with risks skewed to the downside for the upcoming nonfarm payrolls release. The risk of a government shutdown also looms large before a midnight deadline today, with President Trump threatening to fire a lot of federal workers. The US dollar came under modest downside pressure.
Asian currencies broadly gained against the US dollar, which has been weighed down by the risk of a US government shutdown. China manufacturing PMI picked up slightly to 49.8 in September, beating market expectations of 49.6. However, the Thai baht weakened by 0.5% to 32.40 against the US dollar, with Thailand’s current account swinging to a US$1.5bn deficit in August from a US$2.4bn surplus in July.
Elsewhere, we expect the Reserve Bank of India to cut rates by 25bps to 5.25% amid below-target inflation and tariff headwinds. We think lower CPI inflation in India, better monsoon outturns, uncertainties around tariffs, coupled with a still uncertain global environment and US policies will tilt the balance towards a rate cut. The consensus expectation is calling for a hold in RBI’s policy rate.