NFP Preview: Will Jobs Data Revive USD? - ING
According to analysts from ING, a solid jobs report could spark a near-term revival in the US dollar.
Key Quotes:
“Payrolls
to come in a tad softer than expectations (ING: +190k; consensus:
+200k). While some indicators continue to signal a robust hiring
backdrop, the softer ADP print suggests that there are some (albeit
marginal) downside risks to jobs growth in April.”
“Robust
underlying wage pressures should result in decent headline wage growth
(ING: 2.4% YoY; consensus 2.4%). We note that the headline AHE measure
has been hovering at the lower end of a range of US wage indicators,
with the Atlanta Fed’s wage growth tracker continuing to tick higher (on
a moving average basis). Thus, we think the odds of a positive wage
growth surprise are slightly higher this month.”
“More recent USD
weakness has exceeded fundamentals; the stars are aligned for a
data-led correction. With financial conditions arguably less of a
concern and markets barely pricing in a rate hike for 2016, we think USD
price action is “fair game” now and will be a function of forthcoming
US data.”
“With long dollar positioning much lighter (spec
markets are now net short USD vs. major FX), we think the conditions for
a data-led USD correction are ripe. A solid jobs report would set the
tone for a USD revival in May.”
