Back
5 Jun 2014
USD in focus and Nonfarm Payrolls - RBS
FXStreet (Guatemala) - Strategists at RBS put the greenback into focus now for the rest of the week and said that they expect the USD would have less difficulty sustaining upside this time around on an above consensus number in the Nonfarm Payrolls.
Key Quotes:
“The consensus estimate matches our own expectations for US non-farm payrolls. We anticipate headline non-farm payroll growth of +215K in May, including a 220K rise in private payrolls. Largely due to a rebound in the labour force, we expect the unemployment rate will rebound part of the 0.4% decline in April”.
“Our forecast is for a rise in the unemployment rate from 6.3% to 6.4%, with risks of a 6.5% print. The consensus is 6.4%”.
“While still quite low, the Fed's preferred measure of inflation, the core PCE deflator, has indeed crept higher”.
“At the same time, positioning in US Treasuries is likely less extreme after a break below the 2014 range lows and a failed test of major support (resistance in price terms) at 2.40%”.
“Our US Rates Strategy team also sees Tuesday's close in 5y5y USD swaps as the first bear signal in US Treasuries of the year – perhaps signalling a slowdown or end to the bull move of 2014, for now”.
“That should leave the USD, and US interest yields more primed for upside on an outperformance”.
Key Quotes:
“The consensus estimate matches our own expectations for US non-farm payrolls. We anticipate headline non-farm payroll growth of +215K in May, including a 220K rise in private payrolls. Largely due to a rebound in the labour force, we expect the unemployment rate will rebound part of the 0.4% decline in April”.
“Our forecast is for a rise in the unemployment rate from 6.3% to 6.4%, with risks of a 6.5% print. The consensus is 6.4%”.
“While still quite low, the Fed's preferred measure of inflation, the core PCE deflator, has indeed crept higher”.
“At the same time, positioning in US Treasuries is likely less extreme after a break below the 2014 range lows and a failed test of major support (resistance in price terms) at 2.40%”.
“Our US Rates Strategy team also sees Tuesday's close in 5y5y USD swaps as the first bear signal in US Treasuries of the year – perhaps signalling a slowdown or end to the bull move of 2014, for now”.
“That should leave the USD, and US interest yields more primed for upside on an outperformance”.