US NFP: Slightly below consensus call of 170K – RBC CM

Research Team at RBC Capital Markets, suggests that the reactions to recent payrolls releases (highlighted in red) have generally been close to “normal”, though last month’s fall in USD on a 100K upside surprise was a real outlier.

Key Quotes

“Expectations for today’s headline payrolls release have not changed following the mixed signals from the ADP report and (very weak) ISM non-manufacturing survey. The consensus of forecasts that have been refreshed in the last few days is 175K – only marginally below the 180K headline consensus. Our economists have not changed their slightly below consensus call of 170K.

Each 10K upside (downside) surprise in the payrolls report results in a 0.1% fall (rise) in EUR/USD. The elasticity for USD/JPY is, in the long run, very similar, though there have been fewer outliers than for EUR/USD as the direction of the USD/JPY reaction is less ambiguous when markets take their cues from equities.”