Yes folks, it’s time again to take a glance at what some of the big boys are looking for from the NFPs and unemployment rate today. More detail available courtesy of our friends at efxnews.com
And btw if last month’s NFP comp winner, Kooba, wants to reply to my email I shall be happy to sort out the prize as promised. Or mail me anyway at mike@forexlive.com
Goldman: Change in Nonfarm Payrolls (Jan): 250K, Change in Private Payrolls (Jan): 240K, Unemployment Rate (Jan): 5.5%, Average Hourly Earnings YoY (Jan): (0.4% mom).
SEB: 231K, 220K, 5.6%, 0.3% mom.
Morgan Stanley: Change in Nonfarm Payrolls (Jan): 225K,5.5%.
Deutsche Bank: 240k , 5.5% , 0.2%
Nomura: 230k. 220k, 5.6%
CIBC: 230k. 5.6%. 0.3%
Barclays: 250K, 5.5%. 0.3%,
BofA Merrill: 265k, 255k. 5.6%, 0.3% but the risk is that it edges higher. We are expecting the labor force participation rate to increase after the decline in December. Perhaps the most important indicator in the report will be average hourly earnings.We are forecasting a increase in January, which, combined with a likely upward revision to the data in December, would leave the yoy rate to pick up to 1.8%. This is still, of course, a slow pace of wage growth.
Citi: 230k Unemployment and wages arguably more relevant. Base case is for strong outcome, but following recent string of soft data sensitivity to any weakness may be heightened…Bottom line: Trying to decide the trade for NFP? USDJPY is one of the best currencies directionally with some of the least pull-back later in the session, giving it nice risk adjusted rewards. For volatility, a skew between G10 and EM realized vol allows more adventurous traders a way to arbitrage surprises.
RBS: 240k 5.6%. Focus also on average hourly earnings (AHE), expected to tick up 0.3m/m (1.9% y/y)… Note that even though bias sees the next 25bp higher, it’s also skewed towards dip buying (price‐wise, on a strong number) rather than sellers of rallies on a weak number. Inflation still seen as the major driver of bond markets alongside cross‐market yield differentials and other central banks’ policy actions.
Danske: 215k , 200k, 5.6% Average hourly earnings fell steeply in December and we look for a rebound in January. Solid job growth and a rebound in wage inflation should make the Fed more comfortable with starting the normalisation process this year.
Credit Suisse: 230k . We forecast a solid 0.4% monthly rebound in average hourly earnings. We expect another decline in the unemployment rate from 5.6% to 5.5%. After a long period of persistent moves in favour of our underlying USD-bullish forecasts, the market appears to have entered a consolidation phase. We nonetheless see this price action as likely corrective rather than a trend change.
Credit Agricole: 225k, 5.6%...We still expect today’s data to keep Fed rate expectations well supported and as the latest data suggests that investors are prepared for a negative surprise we do not anticipate heightened USD downside correction risk. On the contrary, we remain of the view that the currency should be sold on rallies, for instance against the EUR and the JPY.
BNP Paribas: 220k 5.5% and look for average hourly earnings to rebound sharply from the weak December readings. The combination of rebounding wage growth and the jobless rate fast approaching Fed estimates of NAIRU should more than offset the impact of slowing payroll growth as far as Fed expectations are concerned. Our economists have pushed back their expectations for the start of the Fed hiking cycle to September from June previously, implying less immediate impulse from US rates for the USD. This is still earlier than is fully priced by rates markets and we think risk reward remains attractive for staying long USD.
NAB: 230k 5.6%. A move to 5.5% would bring the unemployment rate into the upper part of the Fed’s 5.2%-5% full employment range. Central to how markets react will be whether average hourly earnings bounces and reverses the unexpected December drop from 1.9% to 1.7% and 2.1% three months ago.
