NFP expected to show positive surprise following solid ADP
Non-farm payrolls data for January is a key macro release scheduled for today. US jobs report will be released at 1:30 pm GMT and market consensus hints at a 50k increase in employment. ADP report released on Wednesday showed an employment gain of 174k, much higher than expected 45k. Previous reading was also revised from -123k to -78k. This puts today's NFP release on track to show a positive surprise. Last month's decline was entirely driven by job cuts in service providing industries. However, as the stimulus bill was passed at the end of 2020, pressures in the services sector should be smaller. This looks to be true as the 174k increase hinted by the ADP report was driven with a 156k increase in the services sector.
US jobs report expectations
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Non-farm payrolls change for January: +50k vs -140k previously
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Average wage growth: +0.3% MoM vs +0.8% MoM previously
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Unemployment rate: 6.7% vs 6.7% previously
USDCAD is one of the markets that may experience a jump in volatility following the NFP release as Canadian labour market data will also be released at 1:30 pm GMT. The pair has been trading in a descending triangle pattern recently and has bounced off the short-term support at 1.2790 earlier today. Upper limit of the pattern can be found in the 1.2830 area while the lower limit is marked with a 1.2760 support zone.
Source: xStation5
