Sneak Peek: Can NFP Benefit from the Return of Workers from General Motors?

December 6, 2019

| Fullerton Markets

Sneak Peek: Can NFP Benefit from the Return of Workers from General Motors?">

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.