Friday’s NFPs have become a highly watched event, as after May +38k figure, Brexit referendum impact and uncertainty in global economy they will definitely provide some hints whether Fed is really off with rate hikes until late-2017. Overall, market is expecting the number between +175k and 183k while the 3 month average is at +116k.
You should bear in mind that the release of strong number may not be enough for Fed to act, due to above mentioned risks and the fact that Fed is in a wait-and-see mode. Actually, even Minutes from last FOMC meeting confirmed that as Fed officials opted for prudent approach while stayed divided about the pace of rate hikes. Strong number supported by pretty good June ISM Non-manufacturing, better Final Service PMI, and eventually very solid Q2 GDP (to be out end of July) may form a good base for Fed thinking again about rate hike this year.
The uncertainty and at certain moments risk off attitude are still present in the market what is well proved by very low yields in US Treasuries. They didn’t even recover during after-Brexit risk-on rally, in other words the low yields erased completely the effect of Dec 2015 Fed rate hike.
As Dudley (Fed) mentioned on Tuesday, we need to be patient on rates because of low inflation and uncertain global economic outlook. According to him US economy is doing well on average and US political process may represent certain risks. Overall, they need to see more data as they do not know more as all of us do.
To get ready for a strong number, check our DXY ( dollar index ) weekly technical overview at:
http://landoftrading.blogspot.dk/2016/07/weekly-tech-overview-week-27.html.
Data will be released Firday at 12:30 GMT:
NFPs: +175k-183k exp, +38k previous
Unempl. rate: 4.8% exp, 4.7% previous
Hourly earnings: 0.2% exp, 0.2% previous M/M
Hourly earnings: 2.7% exp, 2.5% previous Y/Y
Participation rate: N.A. exp. 62.6% previous
Mr Hawk
You should bear in mind that the release of strong number may not be enough for Fed to act, due to above mentioned risks and the fact that Fed is in a wait-and-see mode. Actually, even Minutes from last FOMC meeting confirmed that as Fed officials opted for prudent approach while stayed divided about the pace of rate hikes. Strong number supported by pretty good June ISM Non-manufacturing, better Final Service PMI, and eventually very solid Q2 GDP (to be out end of July) may form a good base for Fed thinking again about rate hike this year.
The uncertainty and at certain moments risk off attitude are still present in the market what is well proved by very low yields in US Treasuries. They didn’t even recover during after-Brexit risk-on rally, in other words the low yields erased completely the effect of Dec 2015 Fed rate hike.
As Dudley (Fed) mentioned on Tuesday, we need to be patient on rates because of low inflation and uncertain global economic outlook. According to him US economy is doing well on average and US political process may represent certain risks. Overall, they need to see more data as they do not know more as all of us do.
To get ready for a strong number, check our DXY ( dollar index ) weekly technical overview at:
http://landoftrading.blogspot.dk/2016/07/weekly-tech-overview-week-27.html.
Data will be released Firday at 12:30 GMT:
NFPs: +175k-183k exp, +38k previous
Unempl. rate: 4.8% exp, 4.7% previous
Hourly earnings: 0.2% exp, 0.2% previous M/M
Hourly earnings: 2.7% exp, 2.5% previous Y/Y
Participation rate: N.A. exp. 62.6% previous
Mr Hawk
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created for informational purposes only and represents the Land of Trading
teams view on past and current economic and capital market environment. It is
not and shouldn´t been viewed as an investment advice and the creator of this
material shouldn´t been hold liable for any loss resulting from action where
despite this disclaimer someone would consider this material
as an investment advice.
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