Employment continued to trend up:
The FOMC June meeting minutes fail to provide direction to the FX markets as traders are remaining focus on today’s June payrolls. We expect June nonfarm payroll employment to increase by the 200,000 which is well above the average monthly gains over the prior 12 months. We also expect the unemployment rate to decline to 3.7% and average hourly earnings to remain unchanged at 2.7%.

Here’s what to watch in June payroll data.

Unemployment rate: Decline to 3.7%:
The May unemployment rate edged down to 3.8%, an 18-year low and over the year, the unemployment rate was down by 0.5 percentage. We expect in June the unemployment rate decline to 3.7%.

Labor force participation rate: Unchanged at 62.7%- little change
Both the labor force participation rate, at 62.7 percent, and the employment-population ratio, at 60.4 percent, changed little in May. In June we believe change will be little, means not declining fast.

Average hourly earnings: Unchanged at 2.7% yoy
We expect average hourly earnings will rose by 0.3% in June, which leaves the annual growth rate unchanged at 2.7% on YoY basis.

Total NFP:
We expect at the end of the second quarter nonfarm payrolls rose +200,000 from 223,000 in May. Over the prior 12 months, an average monthly gain was printed at 191,000.
Recent employ report Nonfarm private employment increased by 177,000 jobs in June fell from May 189,000. Besides, weekly unemployment claims in the week ending June 30, initial claims was 231,000, an increase of 3,000 from the previous week’s revised level.

USDJPY usually attract high volatility to the NFP data. Selling pressure remains strong at 111.00 with solid support at 110.20/110.20. Probably we are trading between 111.00-110.00 and for EURUSD it is between 1.1720-1.1630 ahead of the high voltage data.

 

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