Acceleration in NFP to fuel Dollar buying – MUFG

FXStreet Insights Team FXStreet

All eyes are on the US Nonfarm Payrolls report. Economists at MUFG Bank discuss how employment data could impact yields and the Dollar.

An in-line print could allow the Dollar to adjust a little further weaker

If today’s NFP data was to reveal an acceleration in payrolls it would certainly push further back the expectations on the timing of a downturn, reinforce the ‘higher for longer’ mantra and fuel renewed UST bond selling and Dollar buying.

An in-line print may be greeted with some relief that extends the correction in yields a little further lower from here which would allow the Dollar to adjust a little further weaker too.

The Fed’s Summary of Economic Projections in September revealed expectations of the labour market being stronger (unemployment rate revised down from 4.1% to 3.8% for Q4 2023 – the current level) which means any disappointment in the data like another jump in the unemployment rate has the potential to influence rate expectations that bit more.

See – NFP Preview: Forecasts from seven major banks, losing momentum

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FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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