2 Jul 2015
Will the dollar get interest support from strong US nonfarm payrolls? – KBC
FXStreet (Barcelona) - The KBC Bank Research Team sees risks for a stronger than consensus expectations result for today’s nonfarm payrolls data, and further notes that there is room for additional USD support from interest rates.
Key Quotes
“Today, the eco calendar in Europe is thin. In the US, the focus will be on the payrolls. The claims and factory orders will only be of second tier importance.”
“The consensus expects net US job creation of 233 000 (from a high 280 000 the previous month). Market will also keep a close eye on the unemployment rate and the wages/earnings indicators. We see risks for an strong/better than expected US payrolls report. Yesterday, (currency) markets already anticipated on strong US eco data. However, with a growing number of Fed members preparing markets for a first rate hike if data stay reasonably ok, there is still room for the dollar to get additional interest rate support. Short-term interest rates are not priced for a scenario of two interest rate hikes this year. Of course a downward surprise would be a disappointment for USD bulls. However, this is not our preferred scenario.”
Key Quotes
“Today, the eco calendar in Europe is thin. In the US, the focus will be on the payrolls. The claims and factory orders will only be of second tier importance.”
“The consensus expects net US job creation of 233 000 (from a high 280 000 the previous month). Market will also keep a close eye on the unemployment rate and the wages/earnings indicators. We see risks for an strong/better than expected US payrolls report. Yesterday, (currency) markets already anticipated on strong US eco data. However, with a growing number of Fed members preparing markets for a first rate hike if data stay reasonably ok, there is still room for the dollar to get additional interest rate support. Short-term interest rates are not priced for a scenario of two interest rate hikes this year. Of course a downward surprise would be a disappointment for USD bulls. However, this is not our preferred scenario.”