Is gold price front running a lower average hourly earnings?
US hourly earnings hold the key for US dollar direction
Event: United States Non Farm Payrolls
Released: Monthly on the first Friday
Next release: 1:30 GMT January 06, 2023
Skilling point of view:
Flat US Job growth: Month-on-month US Nonfarm Payrolls have been slowing since February 2022 and now, US job growth has been relatively flat during the previous quarter.
Real US Average Hourly Earnings have increased: While new job creation has slowed, the average hourly earnings reported for November 2022 indicated the strongest increase in 10 months.
USD at risk?
Although the US dollar index has increased around 6% against most other developed currencies during the last 52 weeks, the US dollar could be in danger of weakening sharply against the major FX pairs on Friday, if the NFP report indicates that US Real Average Hourly Earnings fall below market consensus expectations. US real wages have been a key driver of higher inflation during 2022, so any signs that wages are backing off could place the USD under downside risk.
NFP market expectations for Friday, January 06, 2023
Forecasters are calling for at least 200,000 to 220,000 new jobs created during December, while the unemployment rate will remain steady at 3.7%.
The key potential high impact event driver could be if the average hourly earnings comes in above or below forecast.
Higher average earnings could support the Fed to keep interest rates higher for longer, while if average earnings fall below forecast then that could indicate early signs of slowing wage growth, which could even support a case for the Fed to make a policy shift for rate cuts sometime during 2023.
Not investment advice. Past performance does not guarantee or predict future performance.
Event: United States Non Farm Payrolls
Released: Monthly on the first Friday
Next release: 1:30 GMT January 06, 2023
Skilling point of view:
Flat US Job growth: Month-on-month US Nonfarm Payrolls have been slowing since February 2022 and now, US job growth has been relatively flat during the previous quarter.
Real US Average Hourly Earnings have increased: While new job creation has slowed, the average hourly earnings reported for November 2022 indicated the strongest increase in 10 months.
USD at risk?
Although the US dollar index has increased around 6% against most other developed currencies during the last 52 weeks, the US dollar could be in danger of weakening sharply against the major FX pairs on Friday, if the NFP report indicates that US Real Average Hourly Earnings fall below market consensus expectations. US real wages have been a key driver of higher inflation during 2022, so any signs that wages are backing off could place the USD under downside risk.
NFP market expectations for Friday, January 06, 2023
Forecasters are calling for at least 200,000 to 220,000 new jobs created during December, while the unemployment rate will remain steady at 3.7%.
The key potential high impact event driver could be if the average hourly earnings comes in above or below forecast.
Higher average earnings could support the Fed to keep interest rates higher for longer, while if average earnings fall below forecast then that could indicate early signs of slowing wage growth, which could even support a case for the Fed to make a policy shift for rate cuts sometime during 2023.
Not investment advice. Past performance does not guarantee or predict future performance.