- U.S. Non-Farm Payrolls to Rise180K, Unemployment Rate to Hold at 6.7%
- Will December NFP See Large Upward Revision from 74K?
Trading the News: U.S. Non-Farm Payrolls
The U.S. economy is expected to add another 180K jobs in January, but another dismal print may undermine the bullish sentiment surrounding the dollar, especially if we don't see a large upward revision to the 74K December reading.
Time of release:
Primary Pair Impact: EURUSD
DailyFX Forecast: 150K to 200K
Why Is This Event Important:
Nevertheless, a positive employment report may encourage the Federal Reserve to reduce the asset-purchase program by another
Expectations: Bullish Argument/Scenario
Gross Domestic Product (Annualized) (QoQ) (4Q A)
Consumer Confidence (JAN)
Advance Retail Sales (MoM) (DEC)
Firms in the U.S. may ramp up on hiring amid the resilience in private sector consumption, and an upbeat NFP print may trigger a near-term rally in the dollar as it raises the scope of seeing the Fed raise the benchmark interest rate ahead of schedule.
Risk: Bearish Argument/Scenario
Challenger Job Cuts (YoY) (JAN)
ADP Employment Change (JAN)
ISM Manufacturing- Employment (JAN)
However, the recent batch of data certainly does not bode well for the labor market amid the uptick in planned job cuts along with the slowdown in business outputs, and another dismal release may trigger a further decline in the USD as it dampens the outlook for growth and inflation.
How To Trade This Event Risk(Video)
Bullish USD Trade: NFP Increases 180K+; Unemployment Holds at 6.7%
Bearish USD Trade: December Employment Report Falls Short of Market Forecast
Potential Price Targets For The Release
Impact that the U.S. Non-Farm Payrolls report has had on EUR/USD during the last month
(1 Hour post event )
(End of Day post event)
Despite strong ADP Employment Figures ahead of the NFP release last month, US Non-Farm Payrolls for December came in much weaker than market expectations and pushed the USDollar lower across the board. Surveys called for a net positive 196K reading, but figures indicated a weak 74K change. It is worth noting that further potential downside was at least limited by a strong upward revision from 203K to 241K for the November period. Market participants will surely be looking for another upward revision here in addition to a strong print to support the greenback. As for insight into this print, the ADP Employment Figures on Wednesday came in slightly below expectations, but the ISM Non-Manf. Employment component saw a month over month increase. With US yields, USD/JPY and the S&P 500 all at critical levels, a disappointing print could prove disastrous for the greenback moving into the end of the trading week. The lack of a strong upward revision for the December figure will also likely be viewed poorly by market participants.
--- Written by