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The beat on the headline was not a huge surprise after the ADP number. 227K is the figure. However, the wages are a negative surprise. Year over year, wages are  also disappointing, also due to downwards revisions. The number is only 2.5%,  a big downfall. The unemployment rate is 4.8% but at least the participation rate is up to 62.9%, so this is not too bad. Revisions are to the downside.

The US dollar falls on the release but doesn’t go too far.

The other figures (detailed below) are also somewhat confusing, but when the dust settles, the miss on wages could be the dominant theme.

More:  EUR/USD presents perfect range trading on NFP

The US was expected to report a gain of 175K jobs in January 2017 with an unemployment rate of 4.7%.  More importantly, wages were predicted to advance by 0.3% m/m and 2.8% y/y.

The US dollar was rebounding  ahead of the publication, but we saw  three reasons to sell the greenback.

January 2017 NFP Data (updated)

  • Non-Farm Payrolls:  227K  (exp. +170K, last 156K before revisions)
  • Average Hourly Earnings 0.1% m/m, 2.5% y/y  (exp. +0.3% m/m, last month 0.4% m/m, 2.9% y/y)
  • Revisions: -39/k – 156K in December and 164K for November(+19K  last time).
  • Participation Rate: 62.9%  (62.7% last month )
  • Unemployment Rate: 4.8%  (exp.4.7%,  last month 4.6%)
  • Private Sector: 237K  (ADP showed 146K).
  • Real Unemployment Rate (U-6): 9.4%  (previous: 9.2%).
  • Employment to population ratio: 59.9%  (previous: 59.7%)
  • Average  workweek: 34.4(last month: 34.4).

NFP Currency Reaction

  • EUR/USD traded around 1.0730. Euro-zone data was good this week. The price is up to 1.0770 after the fact.
  • GBP/USD  was around 1.2470. The pound suffered some Carney carnage. Cable tops 1.2510 in the aftermath.
  • USD/JPY was around 113.20 and slips.
  • USD/CAD traded around 1.3260. 1.3020 is the new level on Dollar/CAD.
  • AUD/USD bounced to around 0.7640 and is at 0.7680.
  • NZD/USD traded around 0.7260. The kiwi tops 0.73 in the aftermath.

The preview: trading the NFP with EUR/USD