Will NFP day be another non event, or will the U.S. major currency pairs react to the data?

Aug 3 • Extras • 640 Views • No Comments

With the USA close to what economists term “full employment” (the unemployment level is currently at 4.4%), “NFP day” has failed to create much activity in the forex markets, over recent months.

However, with the U.S. dollar at recent lows versus its major peers and the current “risk on” mood of Wall Street, a significant miss, or beat of the forecast, could cause a sudden reaction in the major U.S. dollar currency pairs. As could a fall back to 4.3% unemployment, the sixteen year low recorded in May.

Many analysts and investors look towards the ADP private payroll numbers as a forecast of the NFP data. The ADP data published on Wednesday missed the forecast, by coming in at 178k in July.

Key facts:

NFP forecast is 180k for July, versus 222k jobs created in June.

Average NFP monthly jobs growth in 2016 was 187k.

Weekly unemployment claims have remained at circa 240k, during recent months.

Continuous unemployment claims have remained at circa 1960k, over recent months.

Unemployment rate is forecast to fall to 4.3%, from 4.4%.

Labour force participation rate in the USA is still low, at 62.8%.

Hourly earnings growth is forecast at 2.4% YoY for July, versus 2.5% growth in June.

Year on year, the number of long-term unemployed has fallen by 322,000.

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