News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
More View more
Real Time News
  • Norges Bank Governor says currency market functioning well adds that they have no particular target level for NOK
  • Technical indicators are chart analysis tools that can help traders better understand and act on price movement. Learn more about the importance of technical analysis here: https://t.co/NpC1D8y4Aa https://t.co/2NE7dnWMM4
  • Join @PaulRobinsonFX 's #webinar at 5:30 AM ET/9:30 AM GMT to learn about how you can become a better trader. Register here: https://t.co/WeWGKtdlyz https://t.co/F0bT0tnjiY
  • $NOK slips on the release given market pricing had been for a signal of a slightly earlier hike than previously forecast https://t.co/iQcZ70pCII
  • 🇩🇪 Ifo Business Climate (SEP) Actual: 93.4 Expected: 93.8 Previous: 92.5 https://www.dailyfx.com/economic-calendar#2020-09-24
  • Norges Bank - The policy rate forecast is little changed since June 2020 Monetary Policy Report and implies a rate at the current level over the next couple of years, followed by a gradual rise as activity approaches a more normal level $NOK
  • 🇳🇴 Norges Bank Interest Rate Decision Actual: 0% Expected: 0% Previous: 0% https://www.dailyfx.com/economic-calendar#2020-09-24
  • 🇩🇪 Ifo Business Climate (SEP) Actual: 93.4 Expected: 93.8 Previous: 92.6 https://www.dailyfx.com/economic-calendar#2020-09-24
  • Have you been catching on your @DailyFX podcast "Global Markets Decoded"? Catch up on them now, before new episodes release! https://t.co/Twr44cZ1GB https://t.co/HbVXBTslrS
  • SNB will detail FX interventions on a quarterly basis from September 30
Preview for March NFPs and Trade Setups for USD-pairs

Preview for March NFPs and Trade Setups for USD-pairs

2017-04-07 11:30:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- March US Nonfarm Payrolls report expected to be another solid print after ADP Employment Change and ISM Services come in at high levels.

- However, unseaonably warm weather in United States in January and February may have pulled forward jobs growth from later months.

- Ahead of the US labor data, crowd positioning is net-long USD/JPY, net-long EUR/USD, and net-long GBP/USD - only a slightly favorable mix for the greenback.

Join me today at 8:15 EDT/12:15 GMT for live coverage of the February US Nonfarm Payrolls report in the DailyFX Live Trading Room - register here.

The key issue surrounding today's March US Nonfarm Payrolls report is whether or not the US labor market is improving enough to reduce labor market slack and push up wage growth (which should help inflation), in order to justify the Federal Reserve hiking rates again before the end of the first half of 2017. With Fed funds futures contracts already pricing in around a 60% chance of a rate hike when the FOMC meets in June, the jury is still out. Market participants will be paying attention to the wage component of the report in particular, which has been admittedly lacking gusto despite the unemployment rate holding near the Fed's defintion of "full employment" (at 5% or lower) since for October 2015.

Current expectations for today's data remain strong despite seasonality concerns from economists, with the unemployment rate expected to hold at 4.7%, and the headline jobs figure to come in at +180K. Wage growth is due in around +2.7% y/y, slightly off of the +2.8% figure seen last month, which was near a seven-year high.

The aggregate forecast heading into this report has jumped higher the past few days. Wednesday’s March US ADP Employment report showed +263K new jobs created last month, easily beating expectations of an increase of +185K. Likewise, the March US ISM Services/Non-Manufacturing index eased slightly to 55.2 (from 57.6 previously). Using a 10-year rolling model, the ADP report and the ISM Services report can account for 89% of the changes in the NFP figure (R^2 = 0.89). In sum, these proximal trackers of the US labor market correspond with pace of jobs growth around +200K.

It's important to recognize that due to the unseasonably warm weather the United States experienced in the first few months of the year, jobs growth was probably 'pulled forward' from forthcoming jobs reports. There may be a giveback period, where NFPs sag relative to the outstanding figures seen in January and February. Nevertheless, with respect to the NFP report on Friday, so long as it comes in above +75K to +125K, the jobs data will be good enough to keep the economy on track to maintain the unemployment rate (U3) at 4.7% through the end of 2017 (as per Fed Chair Janet Yellen's commentary at the end of February).

See the above video for a technical review of the DXY Index, EUR/USD, GBP/USD, USD/JPY, USD/CAD, Crude Oil, and Gold.

Read more: FX Markets in Holding Pattern Ahead of Tomorrow’s NFP Report

--- Written by Christopher Vecchio, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES