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.

Free Trading Guides Download
EUR/USD
Bullish
GBP/USD
Mixed
USD/JPY
Bearish
Gold
Bearish
Oil - US Crude
Mixed
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
Bitcoin
Bearish
More View more
Real Time News
  • At this pace, the $SPX would hit a bear market (20% correction from highs) by Monday's close
  • RT @Scutty: [RTRS] - DOW INDUSTRIALS FALL 1,190.95 POINTS; BIGGEST ONE-DAY POINT DROP IN HISTORY
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.08%, while traders in USD/CAD are at opposite extremes with 69.45%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/3PsrWmF8lA
  • $AUDUSD trades to a fresh yearly low (0.6542) amid the rapid rise in the number of COVID-19 cases, and the exchange rate may continue to exhibit a bearish behavior. Get your AUD/USD market update from @DavidJSong here: https://t.co/XtsGTkXhYs https://t.co/j4hqput9E0
  • Event risks for tomorrow includes $EUR German Unemployment Change, $EUR German CPI (YoY) (FEB P), $CAD Gross Domestic Product (YoY) (DEC), USD Advance Goods Trade Balance (JAN), and USD PCE Core (YoY) (JAN) https://www.dailyfx.com/calendar?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr https://t.co/FZ5drmWDeb
  • Reminds of this scene in Austin Powers https://t.co/tiDJVLM99F
  • Well, that was a terrible session for equity bulls. It is not good to be fully committed to a market view especially when traditional value methods call such stark attention to circumstances. As the saying goes "strong convictions, weekly held"
  • Ouch https://t.co/Ci8Txfpf98
  • US Equity Close: $DJI -1,196 (-4.44%) $SPX -138.5 (-4.44%) $NDX -414.3 (-4.61%) $RUT -56.5 (-3.64%) $VIX +10.1 (+36.47%)
  • Indices Update: As of 21:00, these are your best and worst performers based on the London trading schedule: US 500: 0.07% Wall Street: -0.03% Germany 30: -2.00% France 40: -2.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/OoZaNhSRFB
DXY Little Changed After Mixed US NFP Report

DXY Little Changed After Mixed US NFP Report

2018-05-04 13:06:00
Justin McQueen, Analyst
Share:

NFP Analysis and Talking Points

  • US Nonfarm Payrolls rose by 164k in April, missing expectations of 192k expected; Prior month revised to 135k from 103k.
  • US Average Hourly Earnings pace slowed to 2.6% Y/Y and 0.1%, underperforming expectations of 2.7% and 0.2% respectively.
  • US Unemployment Rate fell to 3.9%, lowest level since December 2000

NFP Report Review

US Bureau of Labor Statistics reported total nonfarm payroll (NFP) employment expanded by a modest 164k jobs in April, which fell short of expectations of 192k. However, the headline figure saw an upward revision to 135k from 103k, while the 2-month net revision had been +30k. The US unemployment rate fell 0.2ppts to the lowest level since December 2000 at 3.9%, which also beat expectations of 4%.

The Fed focussed wage data had fallen short of expectations with the Y/Y at 2.6% (Exp. 2.7%) and the M/M at 0.1% (Exp. 0.2%), as such, this reduces fears over a potential overshoot in inflation with the figures indicating a modest build in inflationary pressures in the US economy. Overall, today’s jobs report is further confirmation that the labour market is showing signs that it is tightening and remains robust.

Market Response

In an immediate response to the report, the USD index fell to session lows on the back of the weaker than expected headline print, while the wage data also underwhelmed expectations, which in turn led to a slight unwind of bets that there will be three additional rate hikes this year. However, the selling pressure in the USD was short-lived given that the softer readings had been met with a better than expected unemployment rate of 3.9% (Dec’2000 low) with today’s jobs report somewhat mixed.

DXY Price Chart 1: 1-MINUTE TIME FRAME (MAY 4 INTRA-DAY)

DXY Little Changed After Mixed US NFP Report

Chart by IG

Implications on FOMC Monetary Policy Outlook

Ultimately, this report will unlikely provide a significant ramification for the FOMC’s tightening path in the near-term with a 25bps interest rate hike at the June meeting fully priced in, while in terms of further down the line, according to the CME Fedwatch, the probability of three more rate hikes saw a marginal fall to 37.9% from 40%. (prior to the data).

DXY Little Changed After Mixed US NFP Report

Source: CME

See our Q2 FX forecast to learn what will drive the currency through the quarter.

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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

DISCLOSURES

News & Analysis at your fingertips.