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Payrolls are expected to fall by 8 million in May while the Unemployment Rate is predicted to soar to 19.8%. Figures to confirm the US dollar capitulation to all of its panic induced risk-premium, Joseph Trevisani, an analyst at FXStreet, reports.

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Key quotes

“Nonfarm payrolls shed 20.5 million positions in April, over the last 11 weeks 43 million Americans have filed for unemployment insurance. From a market perspective the expected 8 million loss to May payrolls is old data.”

“The unemployment rate is forecast to jump to 19.8% in May, which would be the highest since the 1938 recession but just barely since the peak that June was 20%.”

“Unless the May NFP numbers are much worse than expected markets will not be moved by one more addition to the long tale of dismal statistics.” 

“If the payrolls are better than predicted reflecting the same improvement as the ADP figures it will confirm the existing market opinion that the economy has put the worst behind it, ratifying the current trends in equities, bonds and currencies.”

“Over the past three weeks the US has lost all its pandemic risk-premium and is back to pre-crisis levels against all of the major pairs. Markets are not quite ready to resume a comparison of economic activity that will probably take until the second quarter is over, but, if the pandemic continues to recede it is next on the agenda.”