Daily Financial Breakfast 7 November 2026: 165,000 Increase in U.S. Payrolls; Fed's Daly Says Economy Leaves Scope to Fight Inflation

165,000 U.S. Jobs Added: Today’s Market News Highlights

• U.S. payrolls rose by 165,000 in October. The figure exceeded expectations of 65,000, while Canada shed 4,700 jobs and recorded a rise in unemployment to 6.7%.
• A solid economy and an encouraging employment report leave policymakers room to finish tackling inflation, according to San Francisco Fed President Mary Daly.
• Although inflation expectations remain anchored, people are still concerned about current inflation, St. Louis Fed President Alberto Musalem said.
• Overlapping shocks to energy, food and supply chains lifted eurozone inflation to 4% in October, ABN AMRO said.

0.74% Dollar Index Rise Leads Market Moves

102.35 Dollar Index: Foreign Exchange Update

Friday’s employment release lifted the U.S. Dollar Index by 0.74% to around 102.35. A 0.77% fall took EUR/USD to around 1.1132 and wiped out its gains for the week. After trading near 1.3463, GBP/USD dropped nearly 0.60% to 1.3371. USD/JPY ended a two-day decline, recovering from an intraday low of 157.26 to around 158.30, while USD/CAD advanced 0.78% to around 1.4120. AUD/USD slipped to levels not seen since late March. Its decline also came amid an AI-led equity sell-off and cautious RBA guidance after its fifth interest-rate increase this year.

$4,060 Gold After Nearly 1% Decline

After touching $4,106 earlier in Friday’s session, gold slipped nearly 1% to $4,060. The stronger-than-expected U.S. employment report sent the metal below $4,100.

Labour Market & Federal Reserve Policy

165,000 U.S. Jobs Added as Canadian Employment Shrinks

October nonfarm payrolls rose by 165,000, against expectations of 65,000, according to the U.S. Bureau of Labor Statistics. Unemployment eased from September’s 4.2% to 4.1%.

Revisions to the preceding two months added a further 84,000 jobs. September’s gain increased from 29,000 to 60,000, and August’s rise was revised from 133,000 to 186,000.

Released at the same time, Canada’s employment figures presented a different picture. Employment dropped by 4,700 in October, Statistics Canada reported, while the unemployment rate climbed to 6.7%.

Markets put the probability of a 25-basis-point Federal Reserve rate increase in December at nearly 80% after the releases, CME FedWatch showed. That compared with around 70% a day earlier.

Solid Economy Leaves Room to Finish Inflation Fight, Fed’s Daly Says

In a CNBC interview on Friday, San Francisco Federal Reserve President Mary Daly called the employment report good news and welcomed the figures. She said the economy remained solid, adding that its strength “gives latitude to get inflation job done,”

Anchored Expectations Despite Inflation Concerns, Fed’s Musalem Says

On Friday, St. Louis Federal Reserve President Alberto Musalem said that “people remain concerned about inflation at the current level.” Inflation expectations nevertheless remain anchored, he added, drawing a distinction between concerns over current prices and expectations for future inflation.

4% Eurozone Inflation

4% Eurozone Inflation Reflects Overlapping Supply Shocks, ABN AMRO Says

ABN AMRO put eurozone inflation at 4% in October. The bank linked the recent acceleration to overlapping shocks involving energy, food and supply bottlenecks, which feed into prices through different channels and at different speeds.

Inflation is expected to stay elevated through 2027, according to the bank. Higher food inflation and price pressures in the goods pipeline are expected to partly offset easing energy inflation. Whether these shocks generate persistent second-round effects will depend centrally on wage demands and inflation expectations, it said.

Looser labour-market conditions and high interest rates should anchor inflation expectations, ABN AMRO said. This should limit a recurrence of the persistent inflation dynamics experienced in 2022–23.