Non-Farm Payrolls only 38K – USD crashes

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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:

EURUSD daily chart after NFP June 3 2016

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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