September data was also revised upward: from 29 thousand to 60 thousand. Unemployment fell to 4.1%. The University of Michigan preliminary consumer sentiment index for November rose to 51 from 48, while expected inflation a year ahead fell to 4.3% from 4.7%, and for five years - to 3.4% from 3.5%.
The market read the strong labor market as permission for the Fed to continue tightening. The probability of a rate hike at the December meeting according to CME FedWatch (a service that calculates rate expectations from futures prices) rose to 77% versus 67% the day before. Alberto Musalem, head of the St. Louis Fed, said people continue to worry about inflation at its current level, and linked its excess to the energy shock and spending on artificial intelligence infrastructure.
GBP/USD at the time of publication was trading at 1.3371, although intraday it rose to 1.3463. A failed attempt to break above 1.3500 added selling. Below lies a dense cluster of 50-, 100- and 200-day moving averages around 1.3362, with the next support at 1.3235.
On the UK side, the pound was supported by expectations of another Bank of England rate hike: the regulator flagged such a possibility but saw no clear signs of inflation passing through into second-round effects. Further ahead on the calendar are UK GDP and speeches by Bank of England officials, and on the US side - inflation, weekly jobless claims and comments from Fed officials.
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