- Non -agricultural payrolls are expected to increase in 130,000 in May, compared to the increase of 177,000 registered in April.
- The US Labor Statistics Office will publish the Employment Report at 12:30 GMT.
- The US Employment Report could influence the probabilities of a Fed fees cut in July, affecting the US dollar.
Non -agricultural payroll (NFP), one of the most impact economic data launches (USA), is expected to show additional cooling of the labor market. The main question about the report is whether it will show that labor market conditions are healthy enough for the Federal Reserve (FED) to continue waiting before cutting the policy rate.
The US Labor Statistics Office (BLS) will publish NFP data for May at 12:30 GMT. The data could have a strong impact on the performance of the US dollar (USD) in the short term.
What to expect from the next report of non -agricultural payrolls?
Economists expect non -agricultural payroll to show an increase of 130,000 jobs in May, after the best of the expected increase of 177,000 reported in April. The unemployment rate (EU) is expected to remain unchanged by 4.2%.
The average earnings per hour (AHE), a very observed salary inflation measure, is expected to increase 3.7% year -on -year (yoy) in April, after an increase of 3.8% in March and April.
By anticipating the April Employment Report, TD Securities analysts said: “Employment growth should have cooled at their slowest pace in three months, with payrolls registering an increase below the 110k consensus in May.”
“We anticipate a cooling in employment creation for the sectors of goods and government, as well as for leisure and hospitality. The unemployment rate is expected to remain unchanged in 4.2% per second consecutive month, while salary growth has probably accelerated to 0.3% m/m,” they added.
How will the non -agricultural payrolls of the US April/USD affect?
The US dollar (USD) struggles to stay resistant to their rivals this week while investors expect clarity about the commercial policy of US President Donald Trump. In addition, the disappointing macroeconomic data launches, such as the monthly Automatic Data Processing (ADP) report that showed a lean increase of 37,000 in the private sector payrolls, contributed to the fall of the USD.
In response to the weak ADP data, the US president, Trump criticized the president of the FED, Jerome Powell, to arrive too late and asked him to reduce interest rates.
Meanwhile, the president of the Fed of Minneapolis, Neel Kashkari, acknowledged earlier this week that the labor market is showing some signs of deceleration. However, Kashkari argued that the Central Bank must still remain in a waiting mode to evaluate how the economy responds to uncertainty.
Similarly, the president of the Fed of Atlanta, Raphael Bostic, said that the best approach to monetary policy is “patient”, adding that the labor market seems to be generally healthy despite showing some signs of weakness.
In the event that NFP data disappointed with a reading below 100,000, investors could reassess the possibility of a Fed fees cut in July and cause the USD to face a new sales pressure. In this scenario, it is likely that the EUR/USD accumulates bunder impulse for the weekend.
On the contrary, a significant positive surprise, with a NFP between 160,000 and 200,000, or more, could convince the markets of at least two more meetings (June and July) in which the Fed will keep the stable interest rates. The USD could gain strength with the immediate reaction to such impression and trigger a decrease in the EUR/USD.
According to the CME Fedwatch tool, markets are currently valuing approximately 30% probability of a reduction of 25 basic points in the policy rate in July.
Eren Sengezer, leading analyst of the European session at FXSTRET, offers a brief technical perspective for the EUR/USD:
“The EUR/USD clings to a short -term bullish bias, with the indicator of the Relative Force Index (RSI) in the daily graphic keeping comfortably above 50. In addition, the pair continues to move away from the simple mobile average (SMA) of 20 days, currently located about 1,1300, after stabilizing above it at the end of May.”
“On the positive side, 1,1500 (static level, round level) is aligned as the first level of resistance for EUR/USD before 1,1575 (maximum of April 21) and 1,1700 (static level of February 2021). Looking south, you could identify supports in 1,1300 (SMA of 20 days), 1,1250 (fibonacci setback from January to May, SMA of 50 days) and 1,1050 (fibonacci setback from 38.2%). “
Faqs non -agricultural payrolls
Non -agricultural payroll (NFP) are part of the monthly employment report of the US Labor Statistics Office. The non -agricultural payroll component specifically measures the change in the number of people employed in the United States during the previous month, not including the agricultural sector.
The number of non -agricultural payroll (NFP) can influence the decisions of the Federal Reserve by providing a measure of the success with which the Fed is fulfilling its mandate to promote full employment and an inflation of 2%. A relatively high NFP figure means that there are more people used, earning more money and, therefore, probably spending more. A result of relatively low agricultural payrolls, on the other hand, could mean that people are having difficulty finding work. The Fed will normally increase interest rates to combat high inflation caused by low unemployment, and lower them to stimulate a stagnant labor market. “
Non -agricultural payrolls generally have a positive correlation with the US dollar. This means that when the figures are higher than expected, the dollar tends to rise and vice versa when they are minors. Non -agricultural payrolls influence the US dollar under its impact on inflation, monetary policy expectations and interest rates. A higher NFP generally means that the Federal Reserve will be more restrictive in its monetary policy, which will support the dollar.
Non -agricultural payrolls generally have a negative correlation with the price of gold. This means that a number of payroll greater than expected will have a depressive effect on the price of gold and vice versa. A higher NFP generally has a positive effect on the value of the US dollar and, like most main raw materials, gold is quoted in US dollars. Therefore, if the US dollar gains value, less dollars are required to buy an ounce of gold. In addition, higher interest rates (which generally helped a higher NFP) also reduce the attractiveness of gold as an investment compared to staying in cash, where money will at least generate interest. “
Non -agricultural payrolls are only a component within a broader employment report and can be seen eclipsed by other components. Sometimes, when non -agricultural payrolls are greater than expected, but the average weekly profits are lower than expected, the market has ignored the potentially inflationary effect of the main result and interprets the fall in profits as deflationary. The components of the participation rate and the average weekly hours can also influence the market reaction, but only in rare events such as the “great resignation” or the global financial crisis. “
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
