The US Employment Situation Report is announced at 1330BST today. The Non-farm Payrolls number creates the headlines but increasingly in recent months traders have been assessing the report as a whole to see what impact the data will have. Going into the Non-farm Payrolls report the dollar has been very strong as the market has increasingly been pricing in a Fed rate hike in December. The CME Group FedWatch tool suggests a probability of around 63% for a December hike now. Non-farm Payrolls will today play a significant role in driving market expectations and could be a big mover on the markets. We assess the potential impact.
Good, Bad or just in line
The impact on the markets
With the market increasingly moving for a December hike (i.e. no move in November), moving into the report this will mean that good news will be good for the dollar and good for risk appetite. In contrast, a weak report would likely to begin a dollar correction on profit-taking, the size of which would probably depend upon the size of the negative surprise.
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