The past two years have seen the biggest swings in oil prices in 14 years, which have baffled markets, investors, and traders due to geopolitical tensions and the shift towards clean energy.
Non-farm payrolls: the forecasts
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.
Key levels for EUR/USD
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.
Key levels for USD/JPY
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).
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
Last Friday’s NFP was disappointing. The reaction of the markets was astonishing. Will it last longer? Let's find out the main trade opportunities for the upcoming week.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.
Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?