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#1 01-10-2019 09:44:52

johnedward
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EUR/USD: 2 banks give their forecasts for this week's big NFP report

NFP report: 2 banks give their forecasts for this week's most important EUR/USD event


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The NFP report on last month's US job creation will undoubtedly be one of the most important statistics of the week regarding influence on the EUR/USD currency pair.

Below are forecasts by two banks for this key economic report release:

NBF anticipates an acceleration in job creation

According to analysts at National Bank Financial, the most important news this week will be the number of non-farm jobs last month, as unemployment claims continued to fluctuate around their lowest level in 5 decades during the month, suggesting a very low layoff rate.

"Private sector hiring may have declined somewhat, judging by Markit's composite PMI report, which shows that employment has grown at the slowest rate in over 4 years. However, this deceleration could be offset by the hiring of temporary workers in the federal government to help conduct next year's census."

"All in all, we expect a slight acceleration in job creation to 160,000 jobs, a level still sufficient to absorb new entrants to the labour market and keep the unemployment rate stable over the long term (about 110,000 jobs per month). The unemployment rate could remain unchanged at 3.7% if, as we believe, the household survey shows only a slight decline in employment after the disproportionate gain in August."

Nordea Markets expects a bad surprise for the NFP report

According to Nordea Markets, the next NFP report will prove to be interesting news, or at least the stakes are higher than what we have become used to in recent reports.

"For the first time in ten years, the two sub-indexes of manufacturing and service PMI reported below 50 in the Markit survey. If these employment SMIs have a decent predictive power over the NFP (we are far from convinced of this), then a value below 50 should be considered as an indicator of a negative monthly number of jobs. If we get that, expect a massive flight to quality."

"Other indicators such as overtime and the Household Employment Survey are moving in the same direction, but in a less dramatic way. Overall, we bet we will see stronger evidence of a slowdown in employment next Friday. The risks are (clearly) down from consensus expectations."


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