9 Jan 2015
USD slight soft ahead of US jobs data – BBH
FXStreet (Barcelona) - The Research Team at Brown Brothers Harriman, previews the US jobs data to be released today, noting that last minute position adjustments has kept the USD soft, further adding that a disappointing report might lead to some profit taking into USD long positions.
Key Quotes
“The US dollar is slightly softer amid last minute position adjustments ahead of the US jobs data. After the outsized 321k increase in nonfarm payrolls in November, a more trend-like report is expected today.“
“The three-month average of 278k was skewed by the November report. The consensus calls for a 240k increase, which is near the pre-November averages.”
“The details of the report, especially average hourly earnings, are important as well, in light of the FOMC minutes. Provided that labor market continued to improve, a rate hike could still be delivered near mid-year, even if inflation were no closer to the Fed's 2% target.”
“If the consensus is wrong, we suspect it would be that the report is weaker than expected. The December report has disappointed more often than not. The seasonal adjustment is a larger hurdle.”
“The ADP estimate also has a rougher time in anticipating the national figure in December. Average hourly earnings rose 0.4% in November, and it will be tough to match that. The average work week is expected to be unchanged at 34.6 hours.”
“A disappointing report could prompt some profit-taking on long dollar positions as it plays into the hands of those who think that the Fed will not raise rates. This could lift the euro toward $1.1875-$1.1900 and sterling toward $1.5150-$1.5200.”
Key Quotes
“The US dollar is slightly softer amid last minute position adjustments ahead of the US jobs data. After the outsized 321k increase in nonfarm payrolls in November, a more trend-like report is expected today.“
“The three-month average of 278k was skewed by the November report. The consensus calls for a 240k increase, which is near the pre-November averages.”
“The details of the report, especially average hourly earnings, are important as well, in light of the FOMC minutes. Provided that labor market continued to improve, a rate hike could still be delivered near mid-year, even if inflation were no closer to the Fed's 2% target.”
“If the consensus is wrong, we suspect it would be that the report is weaker than expected. The December report has disappointed more often than not. The seasonal adjustment is a larger hurdle.”
“The ADP estimate also has a rougher time in anticipating the national figure in December. Average hourly earnings rose 0.4% in November, and it will be tough to match that. The average work week is expected to be unchanged at 34.6 hours.”
“A disappointing report could prompt some profit-taking on long dollar positions as it plays into the hands of those who think that the Fed will not raise rates. This could lift the euro toward $1.1875-$1.1900 and sterling toward $1.5150-$1.5200.”