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Deutsche Bank: trading the US jobs data

June NFP figure is widely expected to hold above 200K, Deutsche Bank economists say.

However, they note that to get the market exited the reading should come out significantly above the 215K median estimate, at least at 250K. What’s more, is likely to be greater vulnerability to a soft number, especially on the Forex market where the USD has traded heavy.

Weak NFP figure will likely pull the dollar index (DXY) below the 79.75 support to the low 79 area. In case of strong reading strategists recommend buying USD versus JPY, AUD and the CAD.

Chart by Bloomberg. USD index

Economists recommend paying attention to the unemployment rate – it will likely influence the market expectations on the timing of the first Fed rate hike more than NFP. Deutsche Bank expects unemployment to decline from 6.3% to 6.2% (consensus: 6.3%).

 

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