Next Friday, the US official employment report is due. Analysts at CIBC, forecast an increase in non-farm payroll of 5 million. They warn about not getting too excited about a big employment rise, as total payrolls would remain some 15 million below pre-Covid levels.
Key Quotes:
“Other high-frequency employment data show a further improvement to mid-June (no surprise there), but more noteworthy suggest that by mid-June the labour force had recovered pretty much half of the ground lost between March and April. That would imply a rise of 6.5 million in employment on top of the 2.5 million gain in May. Of course, we don’t know how accurately such data account for business closures, and they could also be capturing an increase in working hours among existing employees (although that seems less likely this time given the rise in average working hours last month). However, even scaling back to a 5 million gain still leaves us above the consensus.”
“We won’t be getting too excited about such a big employment rise, as total payrolls would remain some 15 million below pre-Covid levels. And it won’t be smooth sailing from here. With case counts rising again in many states, there’s the threat of physical distancing measures being re-imposed. And even if that doesn’t happen, some businesses may not be able to survive in the current environment. As such, we could see choppy payrolls figures from here, with some declines mixed into a much more gradual positive underlying trend.”
“A strong payrolls figure could see investors pricing in a more “V” shaped recovery again, which would take the US$ weaker and bond yields/ equities higher. However, we expect the ADP survey the day could give the game away and see an even bigger “gain” in jobs.”
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.
Recommended content
Editors’ Picks
EUR/USD stays near 1.0800 after upbeat US data
EUR/USD stays under modest bearish pressure and trades near 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.