Citi

No surprises that it was a muted session overnight, with tight ranges going into the ubiquitous NFP. We expect this trend to continue throughout Europe, with choppiness from any last minute positioning going into the event. CitiFX Strategy sees asymmetric risks with a larger reaction on a miss. EURUSD, USDJPY, USDCNH are some of the pairs that are trading at very interesting levels.

While NFP is going to be the main event, we highlight that CAD could face pressure given double payrolls risk. It’s also worth flagging that Citi Economics is below consensus for the EUR retail sales print this morning. PEN is likely to trade to its own tune going into Sunday’s presidential elections but MXN should be more vulnerable to broader USD price action. INR saw unchanged rates overnight.

RBC Capital Markets

Day ahead: The data in focus today are UK construction PMI, US employment report (see USD), US factory orders, and Canada employment report (see CAD). Fed Chair Powell and ECB President Lagarde will be participating in a climate change panel, so they will be unlikely to discuss monetary policy. USD: RBC Economics believes that the last payrolls report suffered far more from technical issues than it did from people making a decision to avoid finding a job because of generous unemployment benefits. As you look through the data from last month, several facts stand out not the least of which is about half of the topline job categories either saw zero job gains or actually shed workers.

Given what we know about the thrust of economic activity in Q2, that doesn’t smell quite right. Our hope is that the BLS has figured things out for the coming report, but hope is not how you build a forecast. What we know is that several of the other key labour market metrics have continued to show improvement, but total continuing claims (i.e. including the extended programs) seem to have lost momentum. That injects a cautious tone to our model. As a result, we have pencilled in a below-consensus 500k headline payrolls gain (cons. +674k) and 450k for private jobs.

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.