Can tonight’s U.S. Employment Data maintain the USD trend?

ตุลาคม 4, 2019
by Joseph Jeffriess, Market Analyst

Article Recap

Tonight’s U.S. Employment Data 22:30 pm AEST:

• Average Hourly Earnings m/m EXP 0.3%
• Non-Farm Employment Change EXP 145K
• Unemployment Rate EXP 3.7%

So it’s the first Friday of the month, and that means U.S. Employment data time, including the important non-farm payroll figure.

Hiring in the U.S. is seen as slowing, but many expect the September figure to be just solid enough to suggest anything like an onset of a recession. Investors and traders will be looking closely over the report to see where any weakness lies. Economists are expecting sectors impacted by trade to possibly take a hit.

Economists are looking for 145,000 jobs to have been created in September, wage growth to have increased by 0.2% and unemployment to remain steady at 3.7%. – CNBC

“It’s not a terrible number. It’s not a great number. We only need 100,000 to stabilise the unemployment rate,” said Diane Swonk, chief economist at Grant Thornton. Swonk expects 125,000 payrolls were added in September, and unlike some economists, she does not expect to see much impact from the government hiring of census workers for several months.

“We were growing at more than 200,000 [jobs] a year ago, and we’ve slowed consistently over the year. Some of it is we’ve run out of workers, and there are some soft spots, like manufacturing and retail,” she said. – CNBC

How will the USD Index fair? Currently, the DX (USD Index) is travelling in a medium-term uptrend. We can see on the daily chart below how clearly the trend is going by the HHs and HLs. Worse than expected numbers could favour faster moves by the Fed to cut rates (hurt the USD). Stable to better than expected numbers could hold their hand and give the USD a boost?

With all major data releases, traders should exercise strong levels of risk management due to the volatile movements releases like the NFP can create in the market.

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