MNI US Open: Job Gains Seen Accelerating In October

EXECUTIVE SUMMARY:

• OCT NONFARM PAYROLLS SEEN +450K IN MNI DEALER MEDIAN
• HOUSE SET TO VOTE FRIDAY ON BIDEN'S $1.75TRN ECONOMIC PLAN
• GROWING EXPECTATION U.K. WILL TRIGGER ARTICLE 16 OVER BREXIT DISPUTE: RTE
• MEDIA REPORTS SUGGEST RISING PROBABILITY OF FED CHAIR POWELL RE-NOMINATION

Fig. 1: British Point Continues To Fall After BoE Surprise Hold

Source: BBG, MNI

NEWS:

U.S. NONFARM PAYROLLS: October nonfarm payrolls are expected to have risen by 450k, vs 194k in September, per both the MNI Dealer Median and Bloomberg survey median; the MNI dealer median range is 350k to 675k. The Bloomberg "whisper" number is 500k, up from 450k Thursday morning. The unemployment rate is seen dipping to 4.7%, (4.8% prior), with average hourly earnings +0.4% M/M (vs +0.6% prior).

U.S. FISCAL (BBG): The House plans to vote Friday on President Joe Biden's $1.75 trillion economic package and a separate infrastructure bill, after intense 11th-hour negotiations by Speaker Nancy Pelosi appeared to settle lingering differences. A vote on the massive tax and spending measure follows months of intra-party tension and disputes that carried into late Thursday night. Although much of the bill had been written, there were last- minute changes on modifying the state and local income tax deduction and a provision allowing Medicare to negotiate drug prices. Approval of the infrastructure measure, already passed by the Senate, will send it directly to Biden's desk.

UK / IRELAND /EU (RTRS): There is a growing expectation that Britain will trigger Article 16, a clause which allows for unilateral action if the Northern Irish Protocol, governing post-Brexit trade with the EU, is deemed to be having a negative impact, RTE reported on Friday. "Article 16 update: growing expectation that the UK will trigger. Much more intense discussion in the European Commission about how the EU shd respond," RTE Europe Editor Tony Connelly wrote on Twitter.

FED (WSJ - PUBLISHED OVERNIGHT): Federal Reserve Chairman Jerome Powell was seen visiting the White House on Thursday, according to people familiar with the matter. Mr. Powell's term leading the central bank is set to expire next February. President Biden told reporters on Tuesday that he would announce decisions "fairly quickly" on whether he was offering Mr. Powell another term or tapping someone else to succeed him.

FED (AXIOS - PUBLISHED OVERNIGHT): The White House is asking Democratic senators to meet with Federal Reserve chair Jerome Powell before Thanksgiving — leading some to believe President Biden will renominate him this month, people familiar with the matter tell Axios.

FED: These reports (particularly the WSJ story) boosted the odds of Fed Chair Powell being nominated to serve a second term, per Predictit markets (now 87%, vs 76% prior).

EUROPE ENERGY (BBG): European natural gas futures moved higher after a retreat on Thursday, with traders closely watching flows from Russia. Europe's biggest supplier of the fuel has promised to send more gas to the region starting Monday, following the completion of Russia's domestic stockpiling campaign. Yet, there's still no clarity on exact volumes and exports this month remain low.Russian gas shipments through a major transit link to Germany, which restarted Thursday after a five-day halt, continue. But flows via the Mallnow station, where the Yamal-Europe pipeline ends, remain far below capacity, according to grid data.

ECB (BBG): The slowdown in inflation next year may not be as intense and quick as the European Central Bank had anticipated a few months ago, ECB Vice President Luis de Guindos says. Factors behind quickening inflation to be transitory, but lasting longer than expected, Guindos says. Guindos sees no "important" second-sound effects for now, but says the ECB needs to remain attentive. ECB to decide in December if there will be alternatives to PEEP program due to end in March

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