The Bureau of Labor Statistics (BLS), the Employment Situation for December, is scheduled to be released today at 8:30 a.m. (EDT). In November 2019, total nonfarm payroll employment rose by 266k, a big surprise vs. consensus market expectations 186K jobs. The 3-month average payroll number increased from 189k to 205k (highest since January 2019), while the 12-month average rose slightly from 178k to 183k.


The unemployment rate was little changed at 3.5%, according to the Bureau of Labor Statistics. Besides, the labor force participation rate, held at 63.2 percent in November and has changed little over the year.
According to the BLS, Notable job gains occurred in health care and professional and technical services.

On this Thursday, Private sector employment increased by 202,000 jobs from November to December according to the December ADP National Employment Report

We understand this is well above the November report, and it was a big surprise to market expectations of 160k.

“As 2019 came to a close, we saw expanded payrolls in December,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.

The ADP report is a hint to the Friday’s NFP data, seems the US economy continues to expand to their payrolls, but could deliver moderate weakness.

What does the December 2019 Nonfarm payrolls look like?

After a strong November 2019 report, we expect the data from the US to continue to show a healthy labor market but with little sign of a slowdown. We also expect the unemployment rate likely to remain at 3.5% and the headline payroll gain around 165k. We are more focusing on wage growth. Over the year, average hourly earnings have remained unchanged at 3.1%.

NAB: It’s US payrolls Friday where the consensus is for nonfarm payroll employment to rise by 160k (with the whisper number likely a bit higher after this week’s ADP and non-manufacturing ISM employment reads, notwithstanding the weak manufacturing ISM employment sub-index). The unemployment rate is seen steady at 3.5%, and Average Hourly Earnings also unchanged at 3.1% yr/yr.

ING: Payrolls to rise 150k versus the 160K. The range of analysts polled by Bloomberg is 125,000-210,000.  

Market reaction forecast:

A surprising number could push the USDJPY through the critical resistance level aiming at 110.00 and 110.30, while EURUSD would-be lower to the key support level finds at 1.1060.

In case of a number at or below the consensus forecast, USDJPY could slide back to 109.20-109.00 and 108.60 levels, while EURUSD could rally towards 1.1150by the end of the day and 1.1200 by early next week and AUDUSD could rally towards 0.6890 and 0.6920 levels.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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