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US NFP preview - ANZ

FXStreet (Bali) - The ANZ Research Team provides its view on the upcoming US Non-Farm Payrolls, noting that while the usual volatility is expected, chances are it will be something we can comfortably look through.

Key Quotes

"Questions like “will they or won’t they?” and “October or December” might not get any easier to answer after US labour market data tonight, with the street expecting a so-so +201k gain in payrolls and no change in the unemployment rate."

"Sure, the US economy has the strength to be able to withstand a 0.25%-0.50% cash rate (they’re all versions of zero at the end of the day), but ahead of such a symbolic act, markets have got themselves in a tangle and are looking at every piece of data for clues as if they emanate from 221B Baker Street."

"While payrolls are in the spotlight, and is an important data print, our focus is more on the trend of the data and the likely trend (very gradual) in the Fed funds rate, when it starts to move (we expect December)."

"Sure, any change always creates volatility, but with inflation nowhere to be seen, the Fed has less “license” to “get ahead of the curve”, and we expect the upcoming tightening cycle to be glacially slow and punctuated by long freezes."

"That being the case, while we expect a degree of volatility after tonight’s data, chances are it will be something we can comfortably look through."

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