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Market Insights

The Skilling NFP preview - July 2023

NFP

US Nonfarm Payrolls (NFP) Preview - NFP date: Friday 07 July 2023, Time: 12:30 UTC

Commentary

Happy days if you have been enjoying the bull market. This Friday’s US nonfarm payrolls (NFP) is likely going to signal to the Fed that the economy can handle higher interest rates.

During May 2023, the US created 339,000 new jobs. The consensus is calling for 225,000 new jobs created during June.

Even if the June NFP report suggests that the US jobs market has slowed month-on-month, 225K is still a solid number.

Key points:

  • US labour market remains solid
    Even if the June NFP report suggests a slowing jobs market

US Dollar strength to continue

  • USD is up +1.52% against a basket of G10 currencies during the last 3 months

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Stock markets around the world enjoying the prevailing multi-month bull market

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Bottom line: The still strong US jobs market, lower commodities, and a bull market in full swing should keep supporting consumer consumption while generating higher incomes to keep generating corporate profits in line.

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Nonfarm payrolls key data to watch:

Time/UTC Country Indicator Previous Forecast
12:30:00 PM United States Nonfarm Payrolls (NFP) 339,000 225,000
12:30:00 PM United States Unemployment Rate 3.7% 3.6%
12:30:00 PM United States Average Hourly Earnings, m/m 0.3% 0.3%

Source: May 29 2023 12:17 UTC

What could move the US dollar on NFP day?

  • Higher job creation above the 225K forecast could strengthen the USD
  • Below the 225K could weaken the USD

Trading commentary

Silver further downside below the $22.68 support

Silver remains under downside pressure. Current price $22.80 below its multi-week downward sloping trendline (see chart). Eyes on the $22.70 support level, a break below could signal a resumption of the prevailing downtrend. Downside towards the $21.40s and $19.90s can not be ruled out over the short term (14-25 days). Upside risk seen above the $25.50s.

USD JPY current price consolidating, however, it appears that the bulls could still be in control

USDJPY consolidating the recent multi-week of gains. The prevailing uptrend remains intact, eyes on the 145.66 - 147.67 zone for potential further upside, while downside risk below 142.10 could trigger a potential price corrective move toward the 139.60s.

Dowjones 30 remains technically bullish

Dowjones 30 higher price remains a prospect after the latest week’s price move above its 13 day moving average which looks to have reinforced the short term technical conditions. Downside to watch sits near the $34,134 support, provided price can hold above the $34,130s the prospects for an extension toward the $36,300s can not be ruled out over the medium term (36-49 days).

Bottom line: regardless of if the June US NFP data surprises towards the upside or downside, the current US job market remains robust enough to support the case for an even stronger US dollar. Higher average employee earnings could also help support US consumer spending, keeping the gate open for even higher US stock markets.

Happy trading.

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Not investment advice. Past performance does not guarantee or predict future performance.