EURUSD is a major focus today following the ECB decision yesterday, which was for no policy ease for the immediate future and ahead of U.S. Non-Farm payrolls (NFP) today. As for NFP, street estimate center around reading at or just below 150K for February. The unusually severe winter weather in February is expected to have been a depressant on the data, but its anybody's guess by how much.
The problem for trading is that a weak number is already priced in, so anyone who plans to buy EUR on a weak report will be buying from those already positioned long int the data. Keep in mind also that data clearly has been leaking out ahead of time these days, so there is that to contend with as well.
On top of all this, a weather-distorted report will be seen as temporary by the markets. So the USD should get a "pass" on poor data.
Beware of the unemployment rate. Changes in Federal unemployment benefits could see an artificial fall in the unemployment rate, not to mention a declining labor participation rate. In short, the unemployment rate could fall but that statistic has increasingly become meaningless.
Bottom-line we advise more caution than usual on this report.
nw kw 12:46:19 GMT - 03/07/2014
caution than usual on this report but 1.47 he nuked it down so 1.47 cap 2014/04/07
Mtl JP 12:50:32 GMT - 03/07/2014
john 12:06 - what is the range of estimates around the "center around reading at or just below 150K" ?
any sub 100k or even negative estimate ?
london red 13:14:18 GMT - 03/07/2014
most scattered between 120 and 170k. only a handful outside.
on a beat think best seen cable weakness. on a miss then 16820 doable but upper bolli should be safe. on a miss think usdjpy dips initially but bounces at 102,70 or 102.45. this one needs to move above 103.10 and we probably get a crack at 103.50/65 today. on a miss audusd touches 200 day ma, but dips back down. the 200 day is a big deal, a close above it is likely to see (almost a must really given how breaks and first close play out historically) 9200 same day, not sure market has the legs after this weeks sprint.
the above assumes we get between 100 and 200, either side of that and there will be some scrambling.
Mtl JP 13:17:53 GMT - 03/07/2014
red - THNX !
GVI Forex john 14:06:52 GMT - 03/07/2014
Not a bad employment report. Hopefully the very bad weather is now behind us.
Before the data we heard "A major U.S. bank is saying 300k numbers are very possible in Mar and Apr on a weather payback." Thus this is the scenario for the next few months. Not to get too far ahead of events, but now there is a risk that expectations for the next few months might be too high?
S&P futures are now +8pts and the DJ is +80 pts as well.
fwiw USDJPY and S&P futures are trading exactly in tandem. Keep an eye on stox today.
london john 14:12:16 GMT - 03/07/2014
havent looked at estimates yet john but if they are going to be that high consensus, its going to get priced in in the week or two ahead of the number anyway, so it just means buying euro or cable much lower than current levels if you intend to punt on a weaker than consensus figure. not sure those data come into play today though, bit early to start the second guessing.
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