Today, the June U.S. employment report will be released. As a major event heading into the weekend, it has garnered significant market attention. The focus will be on the growth in non-farm payrolls, with the market consensus forecast expecting an increase of 190,000. Job growth has consistently exceeded expectations this year, except for April. The recent unexpected increase in JOLTs job openings also indicates a tightening labor market.
The unemployment rate is expected to remain unchanged at 4.0%. The labor force participation rate is expected to rise from 62.5% to 62.6%. Regarding wages, which influence price trends, average hourly earnings are expected to slow from 0.4% to 0.3% month-over-month and from 4.1% to 3.9% year-over-year.
This week, the dollar has faced selling pressure due to a series of weaker-than-expected U.S. economic indicators. Investors will be closely watching the employment report to see if the dollar’s downward trend continues into the weekend.
However, it’s important to note that expectations for political stability in the UK and Europe are also contributing to dollar weakness. Yesterday’s UK general election resulted in a landslide victory for the Labour Party, marking their first return to power in 14 years. In France, the runoff election on the 7th may see the ruling party and left-wing coalition preventing the far-right from gaining a majority. These factors are providing support for the euro and the pound. Observers will be watching long-term bond trends and signs of political stabilization.
Risk factors include Trump’s lead in the U.S. presidential race and the possibility of President Biden withdrawing his candidacy. In such cases, a stronger dollar is expected. Additionally, prolonged oil price hikes due to Middle Eastern tensions could increase inflationary pressures, making it harder for U.S. monetary authorities to cut rates.
In the overseas markets, besides the U.S. employment report, economic indicators such as the Eurozone retail sales (May), Canadian employment report (June), and Canadian Ivey PMI (June) are scheduled for release.
Speeches and events featuring prominent figures such as Bundesbank President Nagel, New York Fed President Williams, and ECB President Lagarde are also on the agenda.
Today, attention will be on the USD movement following the U.S. employment report. The plan is to follow the subsequent market trend.
