The return of 46,000 workers to GM could boost employment numbers tonight, though leading indicators show a deterioration. 

We believe that US-EU trade tensions will continue to pressure euro. Short USD/JPY?

  • NFP tonight will be a tricky deal as we are seeing mixed indicators of how the results will turn out.
  • The return of 46,000 workers to General Motors (GM) after a strike in the last few months could boost employment numbers.
  • The ISM non-manufacturing PMI’s employment component came in at 55.5, up from last month’s 53.7 reading.
  • However, ADP employment data showed private payroll rising by only half of October’s numbers and the four-week average of initial unemployment claims rose to 217,750, up from 214,750 last month.
  • Given the mixed data, we believe that employment data could fall short of 185k, as forecasted.
  • Unemployment rate and wage growth could be in line with forecasts.
  • The backdrop of the US-China trade war in which we are seeing upbeat tones from Washington should be taken lightly. 
  • US-EU trade tensions could also pressure any further gains by euro-dollar.
  • The impact on monetary policy will be negligible – even with a strong or weak NFP, Fed will still hold rates until the end of 2019.
  • USD/JPY could move lower towards 107.50 tonight if data were to fall short of expectations.

Updated Sneak Peek_20191206


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