Its that day of the month again and following a more hawkish FOMC on Wednesday today’s non-farm payroll number remains highly anticipated at 13:30 GMT. The outlook from Mrs Yellens swansong as chair on inflation and jobs spiked the USD, but only for a few hours. Anticipation is that US interest rates will rise three time this year with the first move coining in March. The new FED chair Mr Powell is seen as continuing Mrs Yellens cautious approach but he new voting members appear to swing the committee more to the hawkish side.
Non-farm payrolls increased by 148,000 in December, a significant miss from the 190,000 that was expected. Although the ADP number on Wednesday was a robust 50,000 higher than expectations, the positive correlation with the NFP number has weakened recently. A poll by Reuters has the median expectations at 180,000 new jobs for January with estimates varying significantly from 98,000 to 234,000. Unemployment expectations remain unchanged at 4.1% and 17 year lows.
As ever, the focus for remains on the earnings numbers and with wage growth stuck at 2.5% on annual basis and 0.3% month on month, this needs to move the ticker if there is to be any sentiment change for the weak greenback. EURUSD trades at 1.2500 again this morning and Cable holds 1.4200.
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