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Analysts at TD Securities are leaning toward a modest pullback in US June nonfarm payroll gains of 180k vs 223k in May, modestly below consensus expectations.

Key Quotes

“This is mainly on account of a moderation in private services in line with the retreat in the prior month’s ISM non-manufacturing jobs index, and consistent with June ADP report (which has not changed our forecast).”

“We expect an unchanged unemployment rate of 3.8%, with risks skewed to the upside on a rebound in labor force participation.”

“We look for average hourly earnings to rise 0.3% m/m, leading the y/y pace to 2.8% y/y.”


Trade tension is all the rage and with the US set to impose tariffs on China on Friday, the payrolls number could be a secondary concern as far as FX is concerned. That said, this could give a topline disappointment (as we forecast) on job growth a bit more weight despite steady wages as FX markets have returned to a “divergence” narrative and USD firmness.

Disappointment in jobs may make this more of a pain trade for the USD rather than a positive surprise as the US economy has notably performed better compared to its peers. If realized, USDJPY looks to be exposed to the downside with prospective Fed policy firmly priced for tightening and trade tensions at risk of further escalation.

EURUSD pivot point can be found near 1.1720/30, which coalesces with short-term trend resistance established from the May highs and could open a 1.1825 re-test though the durability of an up move could prove fleeting as investors may be loathe to carry risk into the weekend.”