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Thursday, January 9, 2014

Non Farm Payrolls potential outcomes 10-Jan-2014


"+250k – Potential de-anchoring of front end US rates. Long USD vs. ZAR & BRL". 

"+220K – Rising short-term interest rates support the USD broadly as optimism over the US recovery is strengthened further. Long USD/JPY".

"+180K to +220K – This would broadly reflect an "in line with consensus" result. A broadly unchanged US outlook likely leaves longer-term, thematic trends in place. Short EUR/GBP & long USD/CAD".

"+130K to +180K – A modest disappointment but not negative enough to drive a significant shift in FOMC expectations, as the trend hasn't shifted. Long GBP/USD, long EUR/USD".

"+95K to +130K – Market optimism about the US employment situation takes a hit and US short-term rates likely decline. The falling interest rate differential provides relief for CAD and AUD. Short USD/CAD, long AUD/CAD".

"+95K or Lower – The USD likely weakens as the markets consider the possibility that employment gains in the US are slowing. Waning USD interest rate support may provide relief to CAD and TRY. A relief rally may propel USD/CAD lower, but the CAD may dip on a relative value basis because of the implications of a slowdown on the Canadian economy due to the trade ties between Canada and the US. Short USD/JPY, short USD/CAD and short USD/TRY".

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