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What is the expectation for Non-Farm Payrolls?

Today is a rarity for the financial markets; the US employment report (Non-Farm Payrolls) is being released on a Thursday, not the first Friday of the month. This is due to the Friday being Independence Day (July 4th) in the US, a national holiday.

The economic release coincides with the ECB press conference; US average earnings, US initial and continuing jobless claims. Each of these data points should impact the markets, with all being released together; it could lead to confusion and erratic price action, which is difficult to trade.

The US employment figures are released monthly and are closely watched my traders to gauge the economy. Fed Chair Yellens focus on the unemployment rate and slack in the US economy has raised the figures importance, as traders attempt to second guess the Fed’s timing of tightening monetary policy.

ADP Employment

On Wednesday the ADP employment report was released, beating expectations with a strong print of +281,000 jobs. June’s release was significantly higher than May, however ADP were quick to talk down the impressive number, and highlight the average number for May and June.

What do the banks expect for Non-Farm Payrolls?

Non-Farm Payrolls estimate June

Source: Abshire-Smith, Bloomberg and Sigma Squawk

Traditionally the headline number of jobs added has been the focus, however it is clear, that Janet Yellen is focused on the slack in the economy, with the average hours and earnings being more prominent. A strong figure is important for sentiment, and will likely cause a knee jerk reaction at 13:30 (London), though as the different data points are deciphered there is a potential for the other releases to determine price action.

 


The above information is accurate to the best of our knowledge, and from what we believe to be accurate sources. Unfortunately due to factors beyond our control, we are unable to guarantee the validity of the above and it shouldn't be taken as investment advice. 

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