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.
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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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