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#1 09-01-2020 14:49:42

johnedward
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From: Paris - France
Registered: 21-12-2009
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EUR/USD: What can we expect from today's NFP report? 2 banks chime in

EUR/USD: What can we expect from today's NFP report? 2 banks give their forecasts


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While the market is obsessed with the situation in the Middle East and the potential for the Iran-US conflict to escalate, it is important to keep in mind that the economic calendar could influence trading this week.

In this regard, the most important statistic of the week will be released today at 14:30, the NFP report on US job creation for the last month of 2019.

The consensus is for job creation to reach 164k, compared with 266k the previous month, with the unemployment rate stable at 3.4%.

In order to better approach this key publication, we offer the forecasts of 2 banks:

National Bank Financial

"Unemployment claims increased from a historically low level during the month, suggesting a slight increase in the layoff rate. Private sector hiring, on the other hand, may have remained relatively subdued, judging by Markit's flash composite PMI report, which showed that employment grew only marginally."

"We are therefore calling for a deceleration of job creation to 149K, a level still comfortably above what the Atlanta Fed considers sufficient to absorb new entrants into the labour market and keep the unemployment rate stable over the long term".

Wells Fargo

"We expect an increase of 159,500 non-farm jobs last month, following the 265,500 job boom in the preceding month. As mentioned earlier, employment forecasts may change somewhat before the data are released, as indicated in the ISM surveys and possibly the ADP employment report, which did not show as much strength as the BLS data".

"The employment report is full of interesting details that give an overview of many sectors of the economy. Manufacturing data has been more volatile lately due to the previous GM strike and the return of striking workers in the November data. Amidst this noise, the diffusion index, which measures the share of manufacturing industries adding jobs, is gradually improving, suggesting that the manufacturing slowdown may be coming to an end. Household data for last year will also be revised to reflect new population estimates and seasonal factors".

Lastly, and for the record, the ADP report on private sector job creation last month is expected today at 14:15, and this will allow the market to refine its expectations for the NFP report.

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