FXMarketAlerts Team
FXMarketAlerts
Published at 12:02 (GMT) 03 Jul
BRL is trading sideways above 2.223 as the market looks to position ahead of the release of the US labour report where the market median of forecasts is at 215K (4cast: 230k). After yesterday ADP surprise the market is somehow prepare to see an upside surprise and provided the surprise is not that large, the reaction may be minimal. However a number on the 250K vicinity or a unemployment rate closer to 6.% could send the currency to test 2.24. Domestically the market would be assessing the impact of Pres. Dilma rise in Datafolha poll although it does not erase the possibility of a run off election. PMI services and composite data should confirm the market outlook for softening economy. In the US, Jun non-farm payroll, released before Fri's holiday at 12:30GMT will however be key. We expect another solid rise of 230k, 225k private, with a fall in unemployment to 6.2% from 6.3%. Average hourly earnings should rise by 0.2% while the workweek remains at 34.5 hours. Released at the same time will be weekly initial claims, which we expect to fall by 2k to 310k, and May's trade balance. The latter is worth watching as well as the payroll given that trade has played a part in weakening the GDP picture. We expect the deficit to fall to $44.4bn from Apr's wider $47.2bn. At 14:00GMT we expect Jun ISM non-manufacturing index to also come in stronger, at 57.5 versus 56.3.
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