Daily Briefing, July 5 – Economic Events Outlook, Eyes on Nonfarm Payroll

Posted Friday, July 5, 2019 by
Arslan Butt • 2 min read

Happy Friday, traders.

So far, it’s been another great month from the trading point of view as team FX Leaders managed to close a nice number of pips. This week opened with extreme volatility in the wake of G20 summit, but later the market went on a muted mode due to the US Independence Day holiday and the US nonfarm payroll figures. Are you up for making more green pips?

Top Events To Watch Today

U.S Dollar – USD

Labor Market Report – Today at 12:30 GMT, the Bureau of Labor Statistics will be releasing the nonfarm employment change. The US economy disappointed and added just 75k jobs last month, while this month’s figures are expected to jump to 164K jobs.

The unemployment rate is expected to remain stable at 3.6% vs. 3.6% in May.

What to Expect from NFP?
As we know, there’s a moderate positive correlation between ADP employment change and NFP employment change figures. As per the recent report by Automatic Data Processing, Inc, employment creation seems to have had another turbulent period in June, with private businesses scoring merely 102k fresh positions.

Private payrolls grew 102k in June, missing economists forecast of 140k new jobs. The figure sets the stage for another potential setback from Friday’s nonfarm payrolls report, which is anticipated to record a growth of 165k after May’s lackluster 75k.

The dollar may remain under pressure as it’s unlikely that the NFP data could cheer the dollar as expectations remain negative.

Average Hourly Earnings m/m – In addition to the nonfarm payroll and unemployment rate, we need to focus on the average hourly earnings as well. Therefore, we can’t overlook the average hourly earnings, which are also releasing at 12:30 GMT.

How is it going to help us?
In the case of muted nonfarm data, investors usually turn their attention to average hourly earnings reports. This month, the earnings are expected to report a 0.3% increase, up from a 0.2% rise in June.

Canadian Dollar – CAD

Employment Change
Employment Change is due to be released at 12:30 GMT, but with a strong negative forecast of 10.0k which is also well below the previous figure of 27.7k. The employment change is different from unemployment claims. It shows a change in the number of employed people during the previous month. Hence, the higher the figure, the better it is.

Canada is also releasing the unemployment rate at the same time with a negative forecast of 5.5% vs. 5.4% unemployment rate last month. Both economic figures are likely to keep the Loonie vulnerable today.

Fellas, there’s going to be an immense amount of volatility during the US session, so it’s better to save your shots during the European session. Good luck!

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