What to expect from today's non-farm payroll???
How Will The US Government SHUTDOWN affect the result??? Let's find out here...
January's non-farm payrolls figure is expected to be distorted by the mass of unpaid government workers who will be classed as 'unemployed on temporary layoff'. In this instance, the headline figure may produce a confused response, especially with the Fed having insisted on data dependency. We therefore also pay special attention to earnings growth, which is expected to rise by 0.3%, though we could see some deviation from the consensus as pay settlements come into play at the start of the year.
Watching the unemployment rate, there is a chance that this could tick up to 4.0%. Recall in the December report we saw a rise from 3.7% to 3.9% due to a rise in the participation rate, so these metrics will have to be considered in line with each other.
So what does this actually mean? Based on the headline figure as a central focus, the Fed will be happy with anything in the 100-150k or better, while a rise in earnings close to the 0.3% mark should be enough to arrest any material USD weakness over and above what we have seen this week.
On the hourly chart, the dollar index is making lower lows and lower highs indicating bearish momentum. Price stalled at 95.70 and pulled back as we await the result. Looking at the support and resistance levels a break of the 95.16 could be significant in the short term horizon. While on the upside, 96.00 looks strong.
Let's see how this plays out......