Credit Suisse expects a robust 240K gain in June payrolls (consensus: 233K), and expect the unemployment rate to reverse last month's rise, moving back to 5.4%, in line with consensus.
"We expect average hourly earnings rose 0.2% m/m (in line with consensus), which, while slower that last month's 0.3% rise, would put the three-month annualized run rate at a relatively firm 2.5% and leave the year-on-year rate at 2.3%, the top of the recent range.
"Reactions to positive data surprises may be somewhat muted as long as Greece remains a looming risk, with some asymmetry toward reacting more to data disappointments. Ultimately, continued signs of strength in the US data should drive the market to price in more Fed hike risk, and 5s are likely to be the most sensitive to shifting expectations," CS argues.
"We think that the USD will remain bid against the EUR and risk-sensitive currencies (i.e., AUD, ZAR, TRY) and that implied volatility will rise further in the near term," CS projects.
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