Weekly Focus – ECB Nearing the End of Rate Cuts

Weekly Focus – ECB Nearing the End of Rate Cuts

Byadmin

We published our latest economic forecasts this week, with notable downgrade to the US outlook but relatively stable view for euro area growth. Arguing that uncertainty is exceptionally high might feel like a cliché these days, but the forecasts are naturally subject to significant tariff uncertainty. As a base case, we assume that tariffs will remain […]

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GBP/USD Mid-Day Outlook

GBP/USD Mid-Day Outlook

Byadmin

Daily Pivots: (S1) 1.3536; (P) 1.3577; (R1) 1.3612; More… Intraday bias in GBP/USD is turned neutral with current retreat. Some consolidations could be seen but further rally is expected as long as 1.3414 support holds. Break of 1.3615 will resume larger rally to 100% projection of 1.2706 to 1.3442 from 1.3138 at 1.3874. However, break […]

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EUR/USD Mid-Day Outlook

EUR/USD Mid-Day Outlook

Byadmin

Daily Pivots: (S1) 1.1401; (P) 1.1448; (R1) 1.1491; More… Intraday bias in EUR/USD is turned neutral with current retreat. While another rise might be seen, strong resistance could emerge from 1.1572 to limit upside, at least on first attempt. On the downside, break of 1.1356 support will indicate that the corrective pattern from 1.1572 might […]

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Dollar Rebounds as NFP and Wages Beat Forecasts, Tariff Impact Yet to Materialize

Dollar Rebounds as NFP and Wages Beat Forecasts, Tariff Impact Yet to Materialize

Byadmin

Dollar staged a firm comeback today following slightly better-than-expected non-farm payroll figures, with job growth at 139k and wage growth coming in strong at 0.4% mom. While not a blowout report, the data was enough to alleviate immediate concerns of a sharp labor market slowdown. Stock futures also advanced, suggesting that investors are reassessing the […]

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What is the distribution of forecasts for the US NFP?

Byadmin

The ranges of estimates are
important in terms of market reaction because when the actual data deviates from the
expectations, it creates a surprise effect. Another
important input in market’s reaction is the distribution of forecasts.

In fact, although we can have a range of
estimates, most forecasts might be clustered on the upper bound of the
range, so even if the data comes out inside the range of estimates but
on the lower bound of the range, it can still create a surprise effect.

Non-Farm Payrolls

  • 75K-190K range of estimates
  • 110K-150K range most clustered
  • 130K consensus

Unemployment Rate

  • 4.3% (14%)
  • 4.2% (83%) – consensus
  • 4.1% (3%)

Average Hourly Earnings Y/Y

  • 3.8% (10%)
  • 3.7% (45%) – consensus
  • 3.6% (45%)

Average Hourly Earnings M/M

  • 0.4% (2%)
  • 0.3% (71%) – consensus
  • 0.2% (27%)

Average Weekly Hours

  • 34.4 (3%)
  • 34.3 (76%) – consensus
  • 34.2 (21%)

You can notice that the forecasts are leaning towards a softish report. There are more forecasts for higher unemployment rate and lower average hourly earnings figures. Therefore, if the data comes out a bit above consensus, it would have a bigger surprise effect than if the data were to come below consensus.

This article was written by Giuseppe Dellamotta at www.forexlive.com.