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1 Apr 2015
Softer US payrolls data to keep rate hike plans intact – TDS
FXStreet (Barcelona) - FX Strategists at TD Securities are of the opinion that even if the US labour data came out soft, any probable USD setback might be short-lived, and Fed rate hike this year will remain in the picture.
Key Quotes
“This morning’s ADP report will provide some interest for the markets ahead of Friday’s NFP report. The ADP has tended to understate the initial NFP outcome at least in the past few months so something in the low 200k zone (in line with our forecast) should not bother the USD too much; payrolls rose 295k last month after the ADP survey reported a 212k rise in employment in February, after all.”
“The run of strong employment reports from the US over the past year or so implies that the US economy continues to move along at a fairly robust clip overall—in spite of the apparent slowdown in growth in Q1 (the Atlanta Fed’s tracking model for Q1 GDP currently stands at 0.2%).”
“Growth disappointments through Q1 have been commonplace in the past five or so years but the data disappointment trend has proven to be temporary; as regularly as the US data surprise index has weakened in the early part of the year, it has always turned higher again in Q2.”
“With the Fed stressing data dependency, disappointing March NFP data does risk checking the broader USD advance modestly but we would expect any setback to be short-lived., with Fed tightening still a strong prospect later this year.”
Key Quotes
“This morning’s ADP report will provide some interest for the markets ahead of Friday’s NFP report. The ADP has tended to understate the initial NFP outcome at least in the past few months so something in the low 200k zone (in line with our forecast) should not bother the USD too much; payrolls rose 295k last month after the ADP survey reported a 212k rise in employment in February, after all.”
“The run of strong employment reports from the US over the past year or so implies that the US economy continues to move along at a fairly robust clip overall—in spite of the apparent slowdown in growth in Q1 (the Atlanta Fed’s tracking model for Q1 GDP currently stands at 0.2%).”
“Growth disappointments through Q1 have been commonplace in the past five or so years but the data disappointment trend has proven to be temporary; as regularly as the US data surprise index has weakened in the early part of the year, it has always turned higher again in Q2.”
“With the Fed stressing data dependency, disappointing March NFP data does risk checking the broader USD advance modestly but we would expect any setback to be short-lived., with Fed tightening still a strong prospect later this year.”