NFP: what do large banks forecast?
On Friday, May 8, the market attention will be focused on the April Non-farm payrolls release (12:30 GMT). The US economy is expected to have added 228K new jobs last month. This is significantly higher than the March reading (disappointing 126K) and above the psychological barrier of 200k. The unemployment rate is expected to have declined to 5.4%. Let's listen to the analysts at large banks ahead of the release.
Expert consenus forecasts: Bloomberg - 230K, Reuters - 224K, Wall Street Journal - 228K.
Danske Bank forecast a rebound in NFP to 215K. “We estimate that the unemployment rate held steady at 5.5%”, analysts say.
Analysts at Credit Agricole expects the April NFP to come at 190K due to the temporary factors. However, analysts see the USD downside limited and recommend buying the greenback on dips, especially against the euro.A worse outcome is already priced in by the market. Focus will be on earnings growth.
Talking about USD/JPY, analysts at BTMU note that a weak NFP would pull the pair below the 118 support. In contrast, the upside of the pair beyond 120 will be limited even if the figures surprise to the upside.
Chart. US Non-farm payrolls history
Source: Trading Economics