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5 Jul 2013
Flash: Modest USD/majors selling expected post NFP - Westpac
FXstreet.com (Barcelona) - NFP consensus is for a reasonable 165K headline non-farm payrolls gain, after 175K in May, notes Sean Callow, FX Strategist at Westpac.
As for the range of forecasts, Callow says "the one standard deviation range is 147K to 183K, while Westpac is on 145K." The Strategist reminds readers about the trickiness of seasonals, noting "payrolls have disappointed consensus by an average -39K over the past 10 years." On the jobless rate, Callow agrees with consensus to tick down to 7.5% after May’s rise to 7.6%.
On the possible USD reaction, Callow thinks "is likely to be positively correlated with the headline divergence from consensus", hence "If we are right on NFP then there should be some modest USD/majors selling." However, since broad swath of US data has been strong in recent weeks, "we doubt there will be substantial or sustained damage to USD from the report" Callow added.
As for the range of forecasts, Callow says "the one standard deviation range is 147K to 183K, while Westpac is on 145K." The Strategist reminds readers about the trickiness of seasonals, noting "payrolls have disappointed consensus by an average -39K over the past 10 years." On the jobless rate, Callow agrees with consensus to tick down to 7.5% after May’s rise to 7.6%.
On the possible USD reaction, Callow thinks "is likely to be positively correlated with the headline divergence from consensus", hence "If we are right on NFP then there should be some modest USD/majors selling." However, since broad swath of US data has been strong in recent weeks, "we doubt there will be substantial or sustained damage to USD from the report" Callow added.