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Market Insights

The Skilling NFP preview - May 2023

NFP

US Nonfarm Payrolls (NFP) Preview - NFP date: Friday 05 May 2023, Time: 12:30 UTC

Skilling NFP Preview

US Bond

Time/UTC Country Indicator Previous Forecast Units
12:30:00 PM United States Nonfarm Payrolls (NFP) 236 180 k
12:30:00 PM United States Private Payrolls 189 154 k
12:30:00 PM United States Unemployment Rate 3.5 3.6 %
12:30:00 PM United States Average Hourly Earnings, m/m 0.3 0.3 %
12:30:00 PM United States Average Workweek, All Workers 34.4 34.5 hrs
12:30:00 PM United States Prev Nonfarm Payrolls, Rev 326 - k

Key points:

  • The US created 236,000 new jobs in March
  • The US has been producing +200,000 new jobs every month during the last 12 months
  • US unemployment is near a 53 year low

US Dollar Talk

The USD has been under downside pressure during the last 90 days as global risk has been recovering.

Slowing inflation and speculation that the US Federal Reserve is near the end of its rate hiking cycle is also adding downside pressure for the US dollar.

EURUSD

EUR / USD remains in an uptrend and has support at 1.0940 near its 26 day moving average. Provided price can remain above the short term 1.0940 support the prospects increase for the bullish theme to remain intact.

1.1225 upside extension, downside risk below 1.0940 places the prevailing bullish trend at risk of reversing.

GBPUSD

GBP / USD current price 1.2590. Bullish conditions prevailing since higher price series were observed (daily chart) i.e. higher highs and higher lows. Downside support zone spotted between 1.2360 - 1.2190. Upside prospects for the next 26-49 days towards the 1.3220s provided price can hold the uptrend i.e. remain above the lower 1.2190 support.

Looking deeper into the jobs market within the US manufacturing and services sectors

  • The US economy has robust services and manufacturing industries

Included in the monthly Nonfarm payrolls are labour trends and insights within these key sectors.

Employment within the US manufacturing sector indicates employee expansion during the previous 4 months

Softer employment situation within the US non-manufacturing sector was indicated during the previous 4 months, however, the index remains above 50 which implies that the sector is in an employment expansion phase.

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What to expect on Friday’s NFP release

While Friday’s NFP report is forecasted to fall below the 200,000 mark with expectations for 180,000 new jobs created during April, the prospects for a lower jobs number could add support for the case for further downside shift in inflation and add further support for US stock markets, at least in the near term 26-49 days.

Technology stocks could see price support on a lower US NFP report

  • A softer NFP report adds to support the case for the Fed to refrain from hiking rates further
  • The technology sector would see the cost of borrowing stabilize, thereby enabling the sector to improve some profit margins

Technically commentary:

US100 Index consolidating above the 12,772 support, prospects for a resumption of the prevailing multi-month uptrend.

US100 Index upside extension towards 13,900 can not be ruled out provided price can hold above the tentative upward trend line that intersects at the 12,772 support. Downside risk below 12,772 could trigger the end of the prevailing uptrend.

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