💲 USD gains ahead of NFP data release

Stock indices in Europe and US futures are trading higher ahead of the US jobs data release. Slight gains in US index futures come in spite of a broad USD strengthening that can be spotted today. US dollar is trading higher against all major peers and EM currencies.

When it comes to the upcoming NFP release it should be noted that it may be a bit less relevant than usual. Why? Because the FOMC meeting was two days ago! The US central bank launched tapering and said that rate hikes are off the table for now. Having said that, today's reading may not have that much of an impact on monetary policy in the near future. Nevertheless, short-term volatility pick-up around the release hour is likely therefore reading should not be ignored completely.

Market expectations

• Non-farm employment. Expected: 470k. Previous: 194k

• Wage growth. Expected: 4.9% YoY. Previous: 4.6% YoY

• Unemployment rate. Expected: 4.7%. Previous: 4.8%

ADP data released earlier this week pointed to an over-500k jobs gain. However, the most recent NFP report failed to follow in ADP's footsteps and showed a rather lacklustre 194k increase, compared to 523k signalled by ADP. Wage growth data should be watched closely as Powell said that while there are no signs of wage-price spiral yet, Fed watches wage developments closely.

US dollar index (USDIDX) is trading higher today as USD gains against other major currencies. The index has recently bounced off the lower limit of the upward channel and is now testing the resistance zone ranging between 94.50 mark and 38.2% retracement of the 2020 drop. Source: xStation5