Terrible jobs report: 38K jobs gained with additional bad news: -59K in revisions, participation rate falls to 62.6% and the weekly hours are down to 34.4K. Lowest since September 2010. Wages are OK with 0.2% m/m, 2.5% y/y but this doesn’t help.
USD crashing across the board with chances for a rate hike in June basically erased and chances for a hike in July going for 60% to 42% – a rate hike only after the elections?
The US was expected to report a gain of 160K and average hourly earnings to rise by 0.2%. The Verizon strike was said to skew data to the downside, but the magnitude of the impact was unclear.
The US dollar and market in general were very calm ahead of the publication.
NFP Live Blog
May NFP Data (updated)
- Non-Farm Payrolls: 38K (exp. +164K, last 160K before revisions)
- Average Hourly Earnings:0.2%, 2.5% (exp. +0.2% m/m, last month +0.3% m/m, 2.5% y/y)
- Revisions: -59K (-19K last time)
- Participation Rate: 62.6% (62.8% last month )
- Unemployment Rate: 4.7% (exp.4.9%, last month 5% before revisions)
- Private Sector: TBA (ADP showed only +173K).
- Real Unemployment Rate (U-6): 9.7% (previous: 9.7%).
- Employment to population ratio: 59.7% (previous: 59.7%)
- Average workweek: 34.4 (exp. 34.5K, last month: 34.4).
NFP Currency Reaction
- EUR/USD traded around 1.1150 after Draghi’s drag – a quiet ECB meeting which was slightly dovish. The pair shoots above resistance at 1.1250 and hits 1.1270.
- GBP/USD was around 1.4430 with all eyes on the Brexit referendum and recent polls weighing on cable.Cable challenges the 1.45 level, seems cautious ahead of fresh polls.
- USD/JPY was around 108.87 after the yen enjoyed a “buy the rumor sell the fact”.. The pair loses 108 with support at 107.65.
- USD/CAD traded around 1.3080. Trade balance was published in Canada at the same time. The pair is dipping under 1.30
- AUD/USD was around 0.7250 after the blockbuster GDP report earlier in the week. Aussie is challenging resistance at 0.73.
- NZD/USD traded above the 0.6840 support after a rise in milk prices. Kiwi tops 0.69
A free fall of the greenback – here is the daily chart of EUR/USD:
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