The US official employment report will be released on Friday. Analysts at TD Securities look for a slowdown in payroll in May to 300K, the lowest number since April. They consider the impact on the greenback to be limited. Martet consensus is for an increase of 325K in payrolls.
“We look for payrolls to have slowed to a still-solid pace in May, posting their smallest net job gain since April 2021. Indeed, we pencil in an increase of 300k, which is a whisker below consensus expectations at 325k. Despite this loss of momentum, we look for the unemployment rate to decline a tenth to 3.5% in May. We also forecast average hourly earnings to have advanced again at a 0.3% m/m pace.”
“We expect the USD to trade in line with the direction and magnitude of any surprise in the data given its recent correlation flip. We think the m/m AHE (Average Hourly Earnings) will be rather important as well, given concerns about a wage spiral. That said, we think USD moves will be limited with next week's CPI report but expect EURUSD and USDJPY to be particular sensitive given terminal rate correlations.
“We believe the Treasury market reaction to payrolls is likely to be asymmetric. A weaker report will likely trigger a notable bull steepening after investors recently increased pricing for the terminal Fed funds rate to 3.2% from a low of just 2.9% last week.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.