December US Nonfarm Payroll Data a Non-Event
Joe Perry January 10, 2020 2:52 PM
US Nonfarm payroll data was released earlier today, and it showed that 145,000 were created in December vs an expectation of 164,000. November’s strong headline number of 266,000 was revised slightly lower to 256,000. The Unemployment Rate remained unchanged at 3.5%, as expected. In addition, Average Hourly Earnings, which is a measure the Fed favors to help gauge inflation, was only 0.1% vs 0.3% expected. Although this may seem like a large miss, November’s number was revised higher to 0.3% from 0.2%.
As we wrote earlier this week, the December data may not matter too much , as the Fed and the markets turn their focus to data released AFTER the “Phase One” trade deal with China and the USMCA were agreed on. The Fed will meet again on January 29th, and this will be the only NFP data point we get since the last meeting. Therefore, such a benign report will likely have little effect on any rate change. As mentioned in our NFP preview, the market is pricing in over a 90% chance of the Fed leaving rates unchanged at the next meeting.
On a 5-minute chart, within the first hour of the data release USD/JPY has been contained to 20 pip range. USD/JPY is often used as a proxy to gauge whether a data point was “good” or “bad”. Based on the price action after the release, it seems the market took NFP as “neutral.”
Source: Tradingview, FOREX.com
As stock markets continue to remain near all-time highs, the focus for the rest of the day and this weekend will most likely continue to be geo-political events. USD/JPY is approaching the 109.70 resistance level discussed earlier in the week. This will be a focus for the Yen traders for the remainder of the day, as traders may look to take some risk off ahead of the weekend.
Source: Tradingview, FOREX.com
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.