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Large banks: how to trade NFP?

Currency market will be focused on the US Non-Farm Payrolls release on Friday at 13:30 GMT. According to the consensus forecast, the US economy added 240K new jobs in February versus 257K in January. Unemployment rate is expected to have lowered from 5.7% to 5.6%.

 What do large bank expect today?

Credit Agricole: We expect NFP at 245K, unemployment at 5.6%. Investors’ Fed rate expectations will continue to be supported to the benefit of the USD. Negative surprises in NFP can’t be excluded. However, downbeat figures won’t have any sustainable effect unless wage developments weaken considerably. SELL any larger than 25 pip EUR/USD rally following any negative NFP surprise with a stop of at least 100 pips. We target 1.0600 in a few weeks. 

Standard Bank: The data could fall a bit short of expectations. The importance of NFP figures seems to be diminishing relative to wage numbers, so a reading above consensus here would send USD up.

Barclays: NFP will rise by 250K. The unemployment rate will fall to 5.6%, while the average hourly earnings will rise by 0.2%.

RBS: NFP will rise by 260K. The unemployment rate will decline to 5.6%. A very strong NFP could push EUR/USD definitively below 1.10.


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