Analysts at Rabobank offer key insights on today’s main event risk, the US October labor market report slated for release at 1230 GMT.

Key Quotes:

“The rest of the day is going to be all about US payrolls, and average earnings in particular. The ADP employment report earlier in the week suggests the slight risk of an upside surprise to the headline jobs number of 200K. On that earnings front, the consensus is 0.2% m-o-m, which will lift the y-o-y rate to 3.1% from 2.8% due to the magic of base effects.

Naturally, anything markedly higher or lower there is going to play out strongly in markets given the Fed’s view that it needs to keep hiking and the counter-argument, put forward eloquently by our Rates Strategy team yesterday, that workers of the world are so far from united that sustained pay rises still seem a long way off.

Expect room for some serious moves in USD if earnings growth is higher, especially given the sell-off yesterday …”