Daily Financial Breakfast 7 November 2026: U.S. Payrolls Post 165,000 Gain; Economy Provides Scope to Tackle Inflation, Says Fed's Daly

Market News Today: U.S. Jobs Beat Forecasts as Dollar Advances

• October’s U.S. payroll gain of 165,000 exceeded the expected 65,000; in Canada, employment fell by 4,700 and the unemployment rate increased to 6.7%.
• Policymakers have scope to finish bringing inflation under control thanks to economic resilience and encouraging employment figures, San Francisco Fed President Mary Daly said.
• Public concern over current inflation persists, St. Louis Fed President Alberto Musalem said, but expectations for inflation remain anchored.
• Eurozone inflation hit 4% in October, with ABN AMRO attributing the price increases to the combined impact of energy, food and supply-chain shocks.

Dollar Strengthens as Gold Retreats

Dollar Gains After Employment Figures

Following Friday’s employment release, a 0.74% gain brought the U.S. Dollar Index to around 102.35. EUR/USD surrendered its weekly gains, dropping 0.77% to around 1.1132. GBP/USD traded at 1.3371 after a decline of nearly 0.60%, having earlier approached 1.3463. A rebound to around 158.30 from the intraday trough of 157.26 broke USD/JPY’s two-day losing streak. USD/CAD, meanwhile, climbed 0.78% to around 1.4120. For AUD/USD, the fall brought levels last seen in late March back into view. An AI-led share-market sell-off and cautious guidance from the RBA following its fifth interest-rate increase this year also accompanied the decline.

Gold Slips Beneath $4,100

Stronger-than-forecast U.S. employment data drove gold below $4,100 on Friday. Having reached $4,106 earlier in the session, it fell nearly 1% to $4,060.

Employment Trends & Federal Reserve Policy Developments

U.S. Payroll Growth Tops Forecasts With 165,000 Gain as Canada Loses Jobs

A 165,000 increase in October nonfarm payrolls outstripped the forecast of 65,000, figures from the U.S. Bureau of Labor Statistics showed. Unemployment fell to 4.1%, down from 4.2% in September.

The previous two months’ payroll gains were revised upwards by a combined 84,000. September’s rise was put at 60,000 rather than 29,000, with August’s increase raised to 186,000 from 133,000.

In the Canadian release published at the same time, the direction was reversed: Statistics Canada recorded an October employment decline of 4,700 alongside an increase in unemployment to 6.7%.

The probability of a 25-basis-point Federal Reserve rate increase in December rose to nearly 80% in market pricing after the releases, according to CME FedWatch. A day earlier, it had been around 70%.

Economic Resilience Provides Scope to Tackle Inflation, Fed’s Daly Says

Friday’s employment report was welcomed as good news by San Francisco Federal Reserve President Mary Daly during an interview with CNBC. Describing the economy as still solid, she said that this strength “gives latitude to get inflation job done,”

Inflation Expectations Hold Firm Despite Price Concerns, Fed’s Musalem Says

A distinction between unease about current prices and expectations for future inflation was drawn on Friday by St. Louis Federal Reserve President Alberto Musalem. He said that “people remain concerned about inflation at the current level.” Expectations for inflation, he added, remain anchored.

Eurozone Inflation Climbs

Overlapping Supply Shocks Push Eurozone Inflation to 4%, ABN AMRO Says

October’s 4% eurozone inflation rate reflected a recent acceleration driven by overlapping energy, food and supply-bottleneck shocks, according to ABN AMRO. The bank said their effects reach prices via different channels and at different speeds.

Elevated inflation is expected to persist through 2027, the bank said: easing energy inflation will be partly offset by higher food inflation and price pressures in the goods pipeline. In determining whether the shocks lead to persistent second-round effects, wage demands and inflation expectations will be central, it said.

A looser labour market and high interest rates should help anchor inflation expectations, according to ABN AMRO, reducing the scope for a repeat of the persistent inflation dynamics seen in 2022–23.