Before we close up for the day, here is a summary of some of the main developments.
US markets opened slightly lower, but are now up. Following eight straight days of losses, Wall Street appears to have been boosted by the non-farm payrolls report. It was a solid jobs report, with no nasty shocks and an unexpected jump in wages. It does raise the prospect of a rate hike in December, but this was already the expectation.
If the S&P 500 were to close down (it is currently up 0.2%), it would mark the longest running streak since 1980.
Across the Atlantic, European markets are far more jittery about the prospect of a Trump victory at Tuesday’s presidential election. The FTSE is the biggest faller of the major indices, down 1.4% at 6,692.
The pound meanwhile is back above the $1.25 mark for the first time since 6 October.
The 2016 Presidential elections have been a painful story focused on two deeply flawed and damaged candidates. The winner will carry burdens into the White House.
The latest polls are pointing to a Hillary Clinton victory and Republicans maintaining control of the House of Representatives. The Senate is a tossup. Congress is crucially important – plurality in each chamber conveys leadership of every committee – and will determine policy deliberations as well as many appointments in the new administration .
Here in Greece, the EU’s economic tsar Pierre Moscovici has ignited a fierce row with Yanis Varoufakis, the former Greek finance minister.
Moscovici and Varoufakis speak in Brussels in 2015
With a few choice words in his new book, “Midnight in Europe” Moscovici not only accuses the ex finance minister of “unbridled narcissism” but says his negotiating tactics with international creditors at the height of the euro crisis in 2015 did much to exacerbate Greece’s ailing economy.
With his frantic pre-occupation with the media and unbridled narcissism, Varoufakis drew the limelight on himself and for several months cannabilised the discussions.
He contributed to the tension at the talks by refusing any negotiation.
Varoufakis hit back on Friday:
The more the third memorandum crumbles, the more determined, it seems, they are to honour me with their hate because I didn’t sign it. I thank them again.
Northern Ireland’s bid to become a more attractive place to American firms and tourists was dealt a blow on Friday.
United Airlines is pulling the plug on the only direct flight to the US, from from Belfast International Airport to Newark, after the EU blocked regional government state aid to the airline.
It was due to receive £9m keep the route going but this was blocked by the European Commission today, and as a result the American carrier will pull its service in January.
The airport’s managing dfirector, Graham Keddie, described the EU decision-making process as “abysmal, biased and unfair.”
He continued: “This is a vital link for business and losing it will be a body blow to executive ministers who use it to promote Northern Ireland to would-be investors from the United States.”
The Ulster Unionist Party described the loss of the service as an “international embarrassment.” Brussels’ decision will be seized upon by the pro-Brexit Democratic Unionist Party as further evidence of European bureaucrats over-riding the democratic wishes of the local power sharing executive and endangering jobs.
James Knightley, a senior economist at ING, says a December rate hike is now more likely, but it isn’t a done deal:
It seems as though the tightness in the labour market is starting to generate higher pay. The wage story is also good news for consumer spending with average hourly earnings not having risen this fast since mid 2009.
So with the economy creating jobs and workers being paid more, it backs the case for a rate hike from the Federal Reserve in December.
However, it isn’t a done deal. Any market turmoil relating to next week’s Presidential election would quickly scupper thoughts of a policy change.
Capital Economics says the “surge” in US wages signals the Fed will raise rates in December.
Paul Ashworth, chief US economist, writes:
The solid gain in employment and the acceleration in average hourly earnings growth in October will increase expectations that the Fed will hike interest rates in December (assuming that the election doesn’t throw a spanner in the works.)
What will really catch the eye of Fed officials is the 0.4% m/m increase in average hourly earnings last month, which followed an upwardly revised 0.3% m/m gain in September. As a result, the annual growth rate climbed to a seven-year high of 2.8%, from 2.7%.
The US unemployment rate fell to 4.9% in October from 5% in September, as expected.
The US Labor Department said average hourly earnings grew at an annual rate of 2.8%, the highest in seven years and better than the 2.6% expected.
At 161,000, employment growth in October was weaker than the monthly average of 181,000 for 2016. The average monthly increase was 229,000 in 2015.
While the October payrolls figure slightly missed expectations, there were no nasty surprises in the report. US futures narrowed losses after the report.
It's obviously the case that one month's non-farm payrolls will either prove or disprove an entire economic ideology.
The dollar is on track for its worst week in 12 as fears mount that Trump will win the election next week.
The US currency has fallen 1.2% this week against a basket of major currencies.
Jane Foley, currency strategist at Rabobank:
Political uncertainty tends to be currency-negative because the markets find it more difficult to work out how things like trade policy foreign policy are going to play out in the economy.
Connor Campbell, a financial analyst at Spreadex, says markets are having a “full on panic attack” over the possibility that Donald Trump will be the next US President.
Well what started as a few jitters morphed into a full on panic attack this Friday, the European indices plunging at the prospect of Trump moving into the White House.
Looking ahead to this afternoon and, at the moment at least, the Dow Jones futures are suggesting the US index won’t be quite as heavily hit after the bell.
And he has this to say on today’s non-farm payrolls report from the US, to be published in a little over half an hour.
Among all this election chaos comes the US non-farm jobs report for October. Now, one could argue that this is the most pointless non-farm Friday of the year given the proximity of the election, and the fact that the month’s Federal Reserve meeting has already happened.
However, the Fed stated on Wednesday that it only needs to see a bit more evidence that the US economy is in decent health before it feels confident enough to raise rates meaning that, in the eventuality of a Clinton victory, today’s set of jobs data may become more important in retrospect.
Economists are expecting a payrolls to rise by 175,000...
The pound has hit a four-week high against the dollar at $1.2497, up o.2% on the day.
The pound has hit a four-week high against the dollar
The rise in the pound is partly a story of dollar weakness, but also Thursday’s message from the Bank of England that a rate cut is off the table for now, and the government’s Brexit loss in the High Court:
Oil prices are on course for a sixth day of declines, driven lower by a rise in US crude stocks and softer demand.
Brent crude oil is down 0.3% at $46.20. Analysts said markets were also being hit by investor nerves, as traders pull out money ahead of the US presidential election.
Oliver Jakob from the consultancy Petromatrix told Reuters:
There has been a very strong retreat and technically, prices are starting to reach oversold levels.
Investors will look at US non farm payrolls later in the day but I think there will be a pause for a few days ahead of the US elections.
Consumer appetite for new cars has seemed unstoppable in recent years as cheap finance deals and more efficient models have boosted the number of deals.
UK new car sales increased again in October, but at a slower rate of 1.4%, compared with 1.6 in September - a plate change month when sales are typically higher. Fleet sales drove the rise in October, while private sales fell 1.1% compared with the same month last year according to the Society of Motor Manufacturers and Traders.
A total of 180,168 new cars were registered in the UK last month, taking the total in the first 10 months of the year to 2.3 million - 2.5% higher than at the same point in 2015.
Mike Hawes, chief executive of the SMMT, said:
September’s number plate change is always a hard act to follow so the market’s growth in October, albeit moderate, is welcome news.
Low interest rates, affordable finance packages and a range of exciting new models helped attract buyers into showrooms and we now look to government to ensure consumer and business confidence remains buoyant.”
S&P on course for longest losing streak since 1980
As election anxiety reigns, the S&P 500 is on course for its longest losing streak since 1980 if it falls again today.
CMC Markets are predicting US markets will open lower. Market analyst Jasper Lawler:
Stocks in the US look set for a lower open with investors fretting over the election ahead of the October non-farm payrolls report that could act to confirm a move to higher interest rates in December.
There is some selling-exhaustion in US equities so the unemployment figures could help form a short-term base before the election next week. The market is assigning an 80% chance the Fed will hike rates in December so it would take a huge labour market downturn for a single unemployment report to change the course of monetary policy.
Neil Wilson, market analyst at ETX Capital, says markets are on a “knife-edge” before Americans go to the polls on Tuesday:
With Donald Trump having closed the gap on Hillary Clinton the election result is too close to call and markets are on a knife-edge.
There is a definite sense we’re heading for a Brexit-like event – if Trump wins there could be a sharper selloff in risky assets like stocks and the US dollar. If Clinton wins, a rally is on the cards.
Ignoring the longer-term implications, there is a strong chance of immediate and significant movements in prices – particularly as we get results in from key swing states such as Ohio and Florida. And because so many hang in the balance there is a strong chance that markets will overreact when an individual state is called.
Back in June the pound plunged 5% in a matter of seconds when Sunderland voted heavily for Leave. We could see similar gyrations in a broader range of markets, particularly if volumes are down overnight.
Ben Broadbent, deputy governor of the Bank of England, has been giving radio interviews following the Bank’s updated forecasts and decision to hold rates on Thursday.
The Bank raised its forecasts for growth in the short-term, admitting it had been too pessimistic about prospects in the immediate aftermath of the Brexit vote. Policymakers at Threadneedle Street were predicting growth of just 0.1% in the third quarter, but it came in much stronger at 0.5%.
The Bank also told households to prepare for a sharp rise in inflation next year.
Broadbent said it was perfectly normal to adjust expectations “as news comes in”.
He told BBC Radio 4 Today’s programme that he was pleased Mark Carney would remain as the Bank’s governor until 2019, a year longer than he initially signed up for:
I’m extremely happy that the current governor is staying. I think the whole country should be grateful that he is.
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