The FOMC minutes came out overnight from the States and showed that policy makers were left divded on the timing about balance sheet reduction.
The sentiment emerging from the Fed was that over the next few months US monetary policy direction is likely to be heavily influenced by the labour market. Tomorrow’s non-farm payroll data will act as a key springboard to any Fed movement.
Expectation is for a rise to 180,000 to the payroll which is consistent with the acceleration in GDP for the second quarter. Ahead of this annoucement US APD figures have missed expectations with the US creating only 158,000 private sector jobs and this has slightly weakened the USD. However, as we move into the afternoon session more lateral trading is expected as investors await a payroll figure which has substantial implication for the Fed.