The December US jobs report is released today and consensus is for a 138k payroll print and unchanged 4.2% unemployment rate. Our economics team also expects 4.2%, but is flagging room for a surprise on the strong side. Our house projection is 160k, ING’s FX analyst Francesco Pesole notes.
“We think the balance of risks is tilted to the upside for the dollar today, as robust jobs figures could prompt markets to price out a March cut and potentially push the first fully-priced move beyond June. We would still argue that with inflation concerns back on the rise – although the Fedspeak has been quite heterogeneous on that topic – next Wednesday’s CPI report could have deeper market ramifications.”
“In the event of a (moderate) disappointment in today’s job figures, the dollar should take a positioning-readjustment hit, but dollar longs may simply be rebuilt at better levels ahead of key upcoming data releases and Trump’s inauguration on 20 January.”