NFP Outlook

May 8, 2015 by

Non-Farm Payrolls for March was a disappointing one; it came below expectation (126,000). it has since put some downward pressure on the US dollar. The poor figures were blame on unfavourable weather condition and strong US –dollar also affected economic growth

However, the NFP outlook for the month of April is expected to be better than the previous figures.  Economists expect the figures to be 224,000. If we are to assume on the possibilities of positive jobs data, we could actually base our assumption on all major economic events that occurred over the month in the US Economy.  The overall data was good, except ADP employment change, ISM manufacturing PMI and challenger jobs cut were the only data which came out below expectation. If we are to go with these figures, the NFP should be positive.

Furthermore, if the NFP figures should come out bellow expectation, that is an indication of some slacks in the in the US economy. There is no doubt about the fact that millions of Americans are back into work but the problem is that they do not really get the desired work-hour they really need; most of them are on part-time jobs.  If this is the case, interest rate might remain the same for a little longer. The FED is expected to start raising interest rate from summer, but with a weak labour market figures, this might not happen.

A negative NFP will potentially drive EURUSD and USDJPY downward. USDJPY might hit 118.50 to the downside and EURUSD could move down to 1.11565 to the downside. If the NFP comes positive, we might see more upward move to on EURUSD to 1.1450 and potentially to 1.15356. USDJPY might move upward to 120.508