Time to crunch some numbers and see what might happen over the NFP
First we'll take a look at the hottest NFP forecasters in town (according to Bloomberg) and their guesses for today.
Jim O'Sullivan - High Frequency Economics - 170k
Ted Wieseman - Morgan Stanley - 185k
Stephan Buu - CTI Captial - 173k
Robert Dye - Comerica - 185k
Ryan Sweet - Moody's Analytics - 170k
All fairly tight on their calls this month and no one is looking for any shocks
NFP pickers
Across all those surveyed by Bloomberg;
Median estimate 173k
Average 173.22k
Hi 208k
Lo 105k
Reuters est 175k
For the market reaction, I've looked at USDJPY and the most notable reactions were of course the big miss of 38k, and subsequent bounce back to 287k the month after.
NFP reactions
What we have seen these last few months is that the NFP's still have the ability to surprise us, and that's always been the beauty of this data. Just when you think it's sailing along steadily, whammo, it throws a curve ball of a number.
In terms of price action, The market is more likely to react greater to a bad number than a good number. We know the jobs market is strong so even a mild beat or miss isn't going to have much reaction. Over 200-250k we'll get a move well into 103 (based on the current price). Over 250-270k and 104 could be getting a visit. Anything wild like 300+ and we could have some fun.
Anything sub 100k and the dollar will naturally fall to the low 102's. Worse than 50k and we'll probably drop through to the mid 101's or worse. A negative number (we'll get one one day) and the big 100 might come into play.
Of course, it won't just be about the headline number but the earnings, unemployment rate and participation rate.
Average hourly earnings have been holding up well and at 2.6% y/y, that's solid. They're expected to remain unchanged, and rise 0.3% on the month vs 0.2% in Sep.
The unemployment rate is predicted to fall a pip to 4.9%. The prior participation rate was 62.9%
Trading wise, in the grand scheme of things, it will take something terribly awful to shake the Fed and that's unlikely, so a decent dip might be a good opportunity to run into the Dec FOMC, though running positions through the election is a big risk. Still, I'm up for buying a decent dip and if the price stays above 100 into the election and I've got some margin, below the 100 level will become a good place for a stop over it.