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22 Oct 2013
Flash: NFP likely no to have two-way directionality as usual - Rabobank
FXstreet.com (Barcelona) - On today's September’s US payrolls report, expectation is for a headline rise of 180K (with estimates ranging from 95K to 245K), while the jobless rate consensus is for an unchanged 7.3%, notes Michael Every, Rabobank Strategist.
Key Quotes
"Crucially, we don’t believe that this report is likely to have as much two-way directionality for the market as it usually does. A weak report is likely to be positive for bonds by reaffirming that Fed tapering is clearly off the table for a considerable period: that will also lift equities too no doubt (despite the underlying implications for the real economy), while undermining the USD further."
"However, if we get a moderate beat of consensus, say around 200K, the market is likely to recognise that this is still not enough to change the Fed’s overall thinking on tapering given the recent political circus in Washington (which is already booked for second and third performances in December and early in the New Year.)"
"Arguably only a very strong report of around 250K would be clearly negative for bonds and positive for the USD, but the last time we saw a reading of that magnitude was February – and it ultimately proved to be a one-off result."
Key Quotes
"Crucially, we don’t believe that this report is likely to have as much two-way directionality for the market as it usually does. A weak report is likely to be positive for bonds by reaffirming that Fed tapering is clearly off the table for a considerable period: that will also lift equities too no doubt (despite the underlying implications for the real economy), while undermining the USD further."
"However, if we get a moderate beat of consensus, say around 200K, the market is likely to recognise that this is still not enough to change the Fed’s overall thinking on tapering given the recent political circus in Washington (which is already booked for second and third performances in December and early in the New Year.)"
"Arguably only a very strong report of around 250K would be clearly negative for bonds and positive for the USD, but the last time we saw a reading of that magnitude was February – and it ultimately proved to be a one-off result."