NFP leading indicators: Disappointing Michigan Consumer Sentiment anticipates negative signal for US jobs report

FXStreet Team FXStreet

The United States Consumer Confidence Index, released by the University of Michigan, showed a final reading of 97.2, confirming a slowdown in the US consumers' sentiment anticipated in the preliminary release. Following the government shutdown-induced dip from February, the UMich index had recovered its close-to-100 levels in March, but it has regressed a bit in April. That could correlate well with a possible regression in the labor market in March, which would mean the headline Non-Farm Payrolls number or the Average Weekly Earnings figures, to be released next Friday, May 3rd, would suffer in consequence.

Our fundamental analysis guide to trade the US jobs report classifies the UMich Consumer Confidence Index as one of the ten leading indicators that provide some hints of the status and trend of the labor market. According to our NFP crash course, "consumer exuberance can translate into greater spending and faster economic growth. Therefore, a positive correlation is expected to the NFP numbers. As such, a high reading anticipates a strong NFP, if aligned with all the other indicators".

The UMich Consumer Confidence Index is the fourth leading indicator released ahead of next week's April US jobs report. Before this negative signal, we had got positive readings from the previous NFP release, the March ISM Non-Manufacturing PMI (its employment sub-component increased 0.7% from the Feb reading of 55.2), but a negative one coming from the latest JOLTS (Job Openings and Labour Turnover) indicator, which was released on April 9th and showed a retracement from 7.625 million to 7.087 in February.

You can check them out in our US jobs report pre-release checklist table:

Previous Non-Farm Payrolls	Positive	NFP headline and revision numbers showed moderate progress.
Challenger Job Cuts	-	To be released on Thursday, May 2nd at 11.30 GMT.
Initial Jobless Claims	-	To be released on Thursday, May 2nd at 12.30 GMT.
Continuing Jobless Claims	-	To be released on Thursday, May 2nd at 12.30 GMT.
ISM Non-Manufacturing PMI	Positive	ISM’s employment sub-component increased 0.7% from the Feb reading of 55.2.
ISM Manufacturing PMI	-	To be released on Wednesday, May 1st at 14 GMT.
University of Michigan Consumer Confidence Index	Negative	Retracing a bit from 98.4 to 97.2. Consumer confidence dipping after the bounce seen post-US government shutdown end.
Conference Board Consumer Confidence Index	-	To be released on Tuesday, Apr, 30th at 14 GMT.
ADP Employment Report	-	To be released on Wednesday, May 1st at 12.15 GMT.
JOLTS Job Openings	Negative	Job openings abruptly halted their positive trend with a pronounced dip in February.

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

GBP/USD weakens to two-week lows near 1.3520

GBP/USD trades on the back foot, returning to the low 1.3500s, or two-week troughs, on Tuesday. Cable’s bearish price action follows decent gains in the Greenback at the time when investors assess latest US data releases and the persistent uncertainty in the US-Iran crisis.

EUR/USD remains offered; breaks below 1.1600

EUR/USD now accelerates its daily correction, breaching below the key 1.1600 support level on Tuesday. The pair’s daily correction comes on the back of a decent bounce in the US Dollar despite disappointing US data releases and amid persistent geopolitical concerns.

Gold flirts with multi-week lows near $4,300

Gold accelerates its correction and recedes toward the key $4,300 mark per troy ounce on Tuesday. The yellow metal’s persistent decline comes in response to the solid performance of the US Dollar and a sharp move higher in US Treasury yields across the curve.

Bitcoin and Gold Outlook: Bitcoin broadly consolidates, Gold falls as US JOLTS Job Openings rise

Bitcoin (BTC) maintains sideways trading around the immediate $78,000 support on Tuesday. The Crypto King outlook shows signs of cooling after the recent rally above $81,000. However, its downside remains protected, with major moving averages providing support and steady capital inflows absorbing some selling pressure.

Global bond market sell off haunts markets

Global sovereign bonds are selling off as we start a new month. The UK is, unsurprisingly, taking the biggest hit. Two and 10-year yields rose by 10 basis points at one point on Tuesday, and are currently higher by 7 and 8bps respectively.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.