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NFP: what do large banks forecast?

On Friday, June 5, the market attention is glued to the US employment report. What do large banks expect from the today’s release?

Danske Bank: We expect 200K new jobs to have been added in May. Manufacturing is likely to remain the weak spot with the service sector driving job growth. Any rebound in average hourly earnings will indicate a clearer uptrend in wage inflation and convince the dovish Fed members that a 2015 hike is safe.

RBS: We expect the average hourly earnings to increase from 2.2% to 2.3% y/y (highest increase since 2009). Unemployment rate will hold steady at 5.4%

«Stronger-than-expected employment should keep the Fed on pace to hike the Fed Funds rate in September, and pulling forward of expectations could support the USD. A stronger USD and pulled-forward rate hike expectations could pressure commodity prices and weigh on commodity exporter currencies», analysts say.

Goldman Sachs: The 4-week MA of initial jobless claims fell by 19,K in May. However, the employment components of various manufacturing sectors have been weak. Mining sector job losses may persist as well. Warm weather likely inflated the jobs number in April, but this may have taken from jobs gains in May.

Barclays Capital:225K. Private payrolls are expected to have increased by 220K.

Credit Agricole: 210K. It will support our short-term upbeat view on the USD, especially against EUR, JPY and CHF. 


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