NFP data: no threats detected

6 เม.ย. 2018

The US labor market continues to be in excellent shape and all indicates that it will be only better.
A few arguments in favor of this:
- Trump tax reform and activation of economic activity in the country;
- Trump's trade wars are ultimately aimed at protecting domestic producers, which, again, positively affects the labor market;
- Shale producers continue to increase production, re-open wells and create additional demand for labor.
There is no need to expect negative surprises. According to the data from the ADP agency (were published this Wednesday) the number of new jobs was 241K (forecast was 210K). For the sake of fairness, we note that the level of correlation between data from ADP and official statistics of the NFP is rather small (about 25%).

In general, the markets are very positive about today's data. After the Fed with new head leader Jerome Powell confirmed the current path of tightening monetary policy, figures on average hourly wages can’t be particularly feared (the US monetary policy is now somewhat out of market focus). As for the unemployment rate, it has come so close to the so-called "natural" unemployment, that is now almost ideal from the point of view of economic theory.
That is why today we should concentrate mostly on the NFP data.
The current analysts forecasts give the impression that they are taken from the general statistical analysis of the latest data. Considering that on average NFP underperforms data from ADP by 30-40K. We get one more confirmation that the figure close to 190-200K is the average current reality.

Since no serious force majeure occurred, we see no reason for strong deviations of the actual data from the forecasted ones, and we consider the figure of 190-200K to be justified.
As a result, our recommendations, considering the positive expectations - buy dollar, even before the publication of data.