Photographer: Luke Sharrett/Bloomberg

Charting the Markets: The World Awaits the U.S. Payrolls Report

The dollar nears a 10-year high, gold rises for the first day in eight and Richemont shares sink.

It's U.S. jobs day and that means investors are biding their time until its release at 8:30 in Washington. The report will go a long way to deciding whether or not the Federal Reserve raises interest rates in December. According to economists surveyed by Bloomberg, the U.S. economy probably added 185,000 workers in October, which would be a third month the tally has fallen bellow the 213,000 average of the first half of the year. Global stocks are little changed, with the MSCI All Country World Index on track for its fifth weekly gain in six. The gauge has rebounded 10 percent since sinking to a two-year low in September.

An index measuring the dollar against 10 leading global currencies is trading just below a decade high ahead of the U.S. jobs report. The Bloomberg Dollar Spot Index got a helping hand from Fed Chair Janet Yellen's comments on Wednesday that December is a "live" meeting, boosting bets on an increase next month. According to Bloomberg data, the probability of a boost is 56 percent. On the day of October's weaker-than-forecast jobs data, the odds sank as low as 33 percent. This week only three major currencies have risen against the dollar: The Brazilian real, the Taiwanese dollar and the Australian dollar.

Gold has ended its longest losing run since March, for now. Prospects for the precious metal likely depend on the outcome of today's U.S. employment report. It's still on track for a third weekly drop as the likelihood of a U.S. rate hike this year increases. Gold holds less appeal in tightening cycles because it doesn't pay interest or give returns like bonds or equities. The commodity is on track for a third annual decline. That hasn't happened since 2000. Year to date, gold has fallen 7 percent.

 

Richemont warned the second half of its year will be challenging, and its shares dropped the most in over two months. The company which owns Cartier, Vacheron Constantin, Montblanc and Piaget made the announcement as sales dropped in October because of weak demand for watches. The problem area is Asia, where Richemont derives almost half its revenue. Switzerland's timepiece industry is still feeling the effects of China's clampdown on extravagant spending among government officials. Richemont shares have fallen 9 percent in 2015.

Mark Barton is a presenter on Bloomberg TV. Follow him on Twitter @markbartontv

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