Weak NFP: what do analysts say?
US Non-Farm Payrolls added only 74K in December versus the expected increase of 196K and the previous reading of 241K. This figure was probably affected unusually cold weather. In addition, the weak number might be compensating for the large payrolls increase in November. In any case, traders now think that the disappointing report will keep the Fed from tapering QE too quickly.
Westpac: “Next month, annual revisions to seasonal adjustment factors and benchmarking will see these numbers change, possibly a lot, so absorb the message lightly!”
Crédit Agricole: “[The report] helped to support expectations that Fed tapering would take place only gradually, lending a helping hand to risk assets.”
RBC: “When you take November and December in concert you are left with payrolls averaging about 160K. The six-month average is sitting at 170K, so this short term average – November/December – is hardly a deviation from the broader trend.”
UBS: “The Fed is likely to look through the weather-affected December employment report and continue tapering its asset purchases. We thus see Friday’s sell-off in the dollar as a longer-term opportunity to buy the greenback.”