The big event of the day is the August US non-farm payrolls. Canada is reporting unemployment stats too and the ECB chief economist Philip Lane has another speech.
FYI for those of you trading the EUR/USD currency pair in and around NFP, I’ve done a technical review of the chart setups before the last 4 months of NFPs. You can check that out on the Market Research page of FlowBank.com.
The median economist estimate for today’s August NFP jobs number is 1.37 million, that’s down from the 1.76 million in July. The glass half full interpretation is that the economy is still recovering, the glass half empty is that the momentum of the recovery is slowing. With the monthly change in jobs so high compared to normal the range of estimates remains very wide from a loss of 100,000 to gains of 2.4 million.
Markets were not fazed at all by the big miss in ADP’s private payrolls on Wednesday because its proven to be a very poor indicator of NFP during the pandemic. As a result the US dollar leaped to a weekly high as EUR/USD came back down from the 1.20 level.
Economists also expect the unemployment rate to fall to 9.8%, which is very elevated and demonstrates a lot of pain in the economy BUT it’s below that double digit 10% threshold, which is good for market psychology -and pretty good for President Trump too in the run up to the election.
For Canada the unemployment rate is expected to drop to 10.1% in August from 10.9%. And let’s see if ECB chief economist Philip lane walks back or doubles down on his comment that “the euro-dollar rate does matter.”
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