The last two weeks has been about looking forward to one data point: U.S. Non-Farm payrolls. From 24/7 CNBC to major financial newspapers and the financial blogosphere, everyone has only been talking about the jobs data. And if they are not talking about it directly, they’ll finish their statement with something along the lines of: “But then we have the jobs data on Friday”. And I know it’s only going to get worse tomorrow. And it won’t stop for weeks (probably until we change the subject to U.S. GDP estimates at the end of the month).
It’s understandable to see all this little kid excitement. Every other financial news sentence these days involve the phrase “jobless recovery”. This data point on Friday is going to set the tone for days.
But what can we expect?
First, I know that both you and me are completely clueless. Sure, we can guess the number; however, with all the data tricks, seasonal adjustments, government stimulus money, and revisions to prior months that’s going to happen, I doubt anyone can have conviction on their predictions.
Second, the range of the predictions are pretty wild. According to consensus numbers from Bloomberg, it ranges from -50,000 to positive 40,000. However, predictions from many other experts range from -100,000 to positive 100,000.
Overall, I expect cloudy trading tomorrow with chance of high volatility. Don’t listen to anyone and close your FX trades until then. Just wait.
{ 3 comments… read them below or add one }
I think the risk-trade is prevalent again. The dollar had its party in December.
I’m putting my 2 cents on risk-trade.
Well, the dollar is facing some resistance right now. The U.S. is in bad condition, but relative to the UK, the Euzo-zone, and Japan, it’s on the same boat.
I need someon1 to give me some more insight as to why the dollar index can’t rally to 80-81. I think it can.
I’m with the consensus! Risk trade and dollar down!
Why not?
Plus, other non-U.S. places are giving investors better returns. Investors are not going to sit around for cheap U.S. returns on investment.