LOOK AHEAD: Payrolls Headlines US Data For The Week
Aug-29 20:00
- Friday’s nonfarm payrolls report for August is going to be watched extremely closely after last month’s weak July report has subsequently set the tone for price action. The Fed is highly sensitive to downside growth surprises in the labor market.
- Last month’s report was particularly notable for its huge downward revisions of -258k, the largest in at least forty-five years when excluding April 2020 of the pandemic, leaving a picture of a sharp cooling in labor demand.
- President Trump used the large revisions as justification for the highly unusual decision to fire BLS Commissioner McEntarfer shortly afterwards.
- Bloomberg consensus currently looks for nonfarm payrolls growth of 75k, very similar to the 73k in July, but with those two-month revisions also in focus.
- The unemployment rate should be viewed in equal importance to payrolls growth amidst the sharp decline in labor supply that has been seen concurrently, keeping the labor market in greater balance than would otherwise be the case.
- The unemployment rate is seen at 4.3% in August after rising to what was technically a cycle high of 4.25% in July but with the rate tracking between 4-4.25% ever since a high of 4.22% back in July last year. Whilst now outdated, the median FOMC forecast from the June SEP had the unemployment rate increasing to an average 4.5% in 4Q25 as part of its profile with 50bp of cuts to year end.
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US TSYS: Fed Holds Steady, No Decision on Next Meeting
Jul-30 19:53
- Treasury futures are near late session lows, curves bear flattening as projected rate cuts into year end continue to cool after Chairman Powell said the FOMC has not yet made a decision on what it will do at its next policy meeting in September, adding that current policy is appropriate and there is lots of data between now and then.
- Projected rate cut pricing retreated vs. this morning/pre-data (*) levels: Sep'25 at -11.8bp (-16.9bp), Oct'25 at -21.4bp (-29.1bp), Dec'25 at -37.1bp (-46.6bp), Jan'26 at -45.6bp (--55.6bp). Year end projection well off early July level of appr -65.0bp.
- Treasury futures had pared losses after the FOMC kept rate steady as Fed Govs Waller & Bowman dissented in favor of a 25bp cut. "The majority of the Committee was of the view that inflation is a bit above target, maximum employment is at target" Powell said. "That calls for modestly restrictive, in my way of thinking, modestly restrictive stance right now."
- Futures extended well past this morning's ADP/GDP/Core-PCE lows: Sep'25 10Y futures currently trades -10 at 111-01.5 vs. 110-30.5 low (111-14.5 high). Key support is 110-08+, the Jul 14 and 16 low. Clearance of this level would reinstate a bearish theme. First support is at 110-19+, the Jul 24 low. Curves shift to flatter: 2s10s -1.814 at 43.131, 5s30s -1.397 at 94.131.
- Cross asset: Stocks retreating (SPX eminis -20.0 at 6386.0), Gold weaker at 3271.82, Bbg US$ index remains well bid: 1218.99 (+9.01).
EURJPY TECHS: Corrective Pullback
Jul-30 19:50
- RES 4: 177.08 2.000 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 3: 175.43 High Jul 11 ‘24 and a key medium-term resistance
- RES 2: 174.86 1.764 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 1: 172.32/173.97 High Jul 29 / 28 and the bull trigger
- PRICE: 170.66 @ 19:59 BST Jul 30
- SUP 1: 170.58 Low Jul 30
- SUP 2: 169.77 Low Jul 7
- SUP 3: 169.45 23.6% retracement of the Feb 28 - Jul 28 bull leg
- SUP 4: 168.99 50-day EMA
The bullish trend condition in EURJPY remains intact and for now a pullback is considered corrective. The cross has traded through the 20-day EMA. A clear breach of this average would signal scope for a deeper correction and highlight potential for a move towards the 50-day EMA, at 168.99 - a key support. Moving average studies remain in a bull-mode position highlighting an uptrend. A break of Monday's 173.97 high would resume the bull cycle.
USDJPY TECHS: Clears Bull Trigger
Jul-30 19:40
- RES 4: 151.21 High Mar 28
- RES 3: 150.49 High Apr 2
- RES 2: 149.38 50.0% retracement of the Jan 10 - Apr 22 bear leg
- RES 1: 149.31 High Jul 30
- PRICE: 149.25 @ 19:55 BST Jul 30
- SUP 1: 147.07 20-day EMA
- SUP 2: 146.20/145.86 50-day EMA / Low Jul 24
- SUP 3: 145.16 61.8% retracement of the Jul 1 - 16 bull cycle
- SUP 4: 144.21 76.4% retracement of the Jul 1 - 16 bull cycle
A bull cycle in USDJPY remains in place, strengthened by the break of the bull trigger Wednesday. The level, at 149.18, the Jul 16 high, confirms a resumption of the uptrend. Pivot support to monitor is 146.20, the 50-day EMA. A clear breach of it would instead signal scope for stronger reversal. First support is at 147.07, the 20-day EMA.
