- Payrolls: Forecast to rise by 80,000, up from 57,000 in June.
- Unemployment rate: Expected to tick up slightly to 4.3%, largely due to statistical rounding.
- Average hourly earnings: Expected to increase 0.3% month-on-month.
- Payrolls: Forecast to rise by 80,000, up from 57,000 in June.
- Unemployment rate: Expected to tick up slightly to 4.3%, largely due to statistical rounding.
- Average hourly earnings: Expected to increase 0.3% month-on-month.
The July Non-Farm Payrolls (NFP) report is released today at 13:30 BST and is expected to be the key market-moving event of the week.
The report could determine whether the Federal Reserve raises interest rates in September.
- Stronger-than-expected NFP
- Increases the likelihood of a September rate hike.
- Reinforces the "higher for longer" interest rate outlook.
- Likely pushes Treasury yields and the US dollar higher.
- Could trigger a pullback in US stocks after their recent rally.
- Weaker-than-expected NFP
- Reduces pressure on the Fed to raise rates.
- Supports the recent rally in equities.
- Could weaken the US dollar.
- Likely benefits gold, which could extend its recent gains.
Market positioning
Markets appear to be leaning towards a weaker report, following:
- A disappointing ADP employment report (44k).
- Weak employment data from the ISM Services survey.
This means a strong upside surprise could have a larger market impact, as investors may need to quickly reprice Fed expectations.
Key markets to watch
- US Treasury yields: A strong report could push the 10-year yield above 4.6%, potentially towards 5%.
- US stocks: Strong data could interrupt the recent record-breaking rally; weak data would likely support further gains.
- US Dollar: Expected to strengthen on a strong report and weaken on a soft report.
- USD/JPY: A strong NFP could push the pair back towards 160, increasing volatility and raising concerns about further Japanese intervention.
- Gold: A weak NFP could drive gold higher towards $4,500/oz.
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