- USD gains, US100 down ahead of the NFP report
- The consensus sees +200k jobs
- The report is crucial for the Federal Reserve
The NFP report consist of multiple data prints with the 3 most important ones being: employment change (expected at +200k), unemployment rate (3,7%) and wage growth (5%). Recent indicators suggest a strong labour market with ADP showing +235k jobs in the private sector, ISM pointing the strongest hiring conditions in manufacturing since August and weekly data showing no signs of increasing number of the unemployed. Still, the NFP report tends to be very volatile so a surprise is never off the cards.
The „new” version of the ADP has been more accurate and it predicts a strong NFP reading. Source: Macrobond, XTB Research
Our comment: a strong report (employment gain at +200k or above, high wage growth) could be seen as USD positive and equity negative as it would reinforce the hawkish stance from the Fed. However, bear in mind that market expect a strong report so a negative surprise in the data could potentially spark a much stronger reaction (potentially weaker USD and gain in US indices).
Silver prices remain in an uptrend but a declining EURUSD is a risk. Silver buyers would like to see a weak NFP report.
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