2020-07-02 • Updated
The first Thursday of the month is going to be an unusual one, as the United States releases Non-farm payrolls at 15:30 MT time. The American Bureau of Labor Statistics moved the date of the monthly update on employment due to holidays in the United States.
Last month, US job data surprised traders. While analysts expected a fall in NFP by 7 750K, the actual level increased by 2 509K. At the same time, the unemployment rate declined to 13.3% (vs. the forecast of 19.4%). The only negative data was the average hourly earnings. The change in the price businesses pay for labor slid by 1% despite the forecast of a rise by 1%.
Analytical companies anticipate the US labor market to continue stabilizing. Let’s see the forecasts by some of the famous ones.
According to Goldman Sachs, the headline NFP increased by 4 250K in June with the unemployment level at 12.7%.
Merrill Lynch is anticipating less encouraging, but still promising results with the NFP increasing by 2 800K and the unemployment rate at 12.5%.
TD set its NFP estimates at +4 000K. The company notes, that the fundamental background is different this time compared to May’s one, as the cases of COVID-19 are surging.
Finally, Scotia predicts a rise of NFP by 4 000K. At the same time, it says that due to the fundamental changes and volatility, the actual figures may be lower but still in the positive territory.
At the moment, EUR/USD is trading near the 1.1280 level, close to the upper border of the descending channel. Positive NFP will pull the pair down towards 1.1230 (23.6 Fibo level). On the other hand, if the official data disappoints, EUR/USD will break 1.1280 and target the next resistance at 1.1330.
The volatility of the pair has been very low since the start of the day. At the moment, USD/JPY is well-supported by 107.4 (50-day SMA). A lower-than-expected outcome of NFP will pull the pair below this level to the next support at 106.9. A Strong NFP will encourage bulls to push the pair to the 107.9 level (100-day SMA).
China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
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As the US Non-Farm Payrolls (NFP) take center stage, this month's data gains special attention, particularly after the unemployment rate took a concerning turn in the previous month. The US ADP Employment Change reveals a significant decline, with the economy adding 298K new jobs...
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