The Bureau of Labor Statistics (BLS), the Employment Situation for January, is scheduled to be released today, at 8:30 a.m. (EDT). In February 2019 total nonfarm payroll employment rose by 20k, a big miss of consensus market expectations 180K jobs.

The unemployment rate declined by 0.2% to 3.8% according to the Bureau of Labor Statistics. Besides, the labor force participation rate, held at 63.2 percent in February and has changed little over the year.
According to the BLS, this decline in unemployment “reflects, in part, the return of federal workers who were furloughed in January due to the partial government shutdown.”

On this Thursday, the ADP National Employment report showed US Private sector employment increased by 129,000 jobs from February 2018 to January 2019. We understand this is well below the January report and it was a big employment miss of market expectations of 184k. The ADP report is the hint to the Friday’s NFP data, seems US economy continues to add aggressively to their payrolls, but could deliver moderate gains.

“March posted the slowest employment increase in 18 months,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.

What does the March 2019 Non-farm payrolls look like? Jobs growth should bounce back.

After a weak February 2019 report, we expect the data from the US continue to show a healthy labor market but with little sign of a slowdown. We also expect the unemployment rate likely to remain at 3.8% and the headline payroll gain around 175k. We are more focusing on wage growth. Over the year, average hourly earnings have increased by 3.4%, and in March 2019 we expect 0.2%vs previous of 0.4%.

  • James Knightley at ING said “The ISM manufacturing index for March saw a five-point jump in its employment sub-component, so we think a 160,000 reading for March payrolls is achievable. We also think there is scope for an upward revision to the February reading. The consensus estimate is for payrolls growth of 179,000 within a range of 120,000-280,000 from 71 different economists according to the Bloomberg survey.”
  • Danske Bank forecast “We think average hourly earnings rose +0.25% m/m in March, which means an increase in the annual growth rate to 3.3% y/y, down from 3.4% y/y in February. We expect nonfarm payrolls rose 190k. In February, nonfarm payrolls only rose by 20,000, but this was likely a fluke, as nonfarm payrolls are very volatile. Overall, the labor market remains strong, but we think it is important to keep an eye on whether employment growth starts to decelerate.”
  • Mark Zandi, a chief economist of Moody’s Analytics, said, “The job market is weakening, with employment gains slowing significantly across most industries and company sizes. Businesses are hiring cautiously as the economy is struggling with fading fiscal stimulus, the trade uncertainty, and the lagged impact of Fed tightening. If employment growth weakens much further, unemployment will begin to rise.”

The March FOMC statement said, “Payroll employment was little changed in February, but job gains have been solid, on average, in recent months, and the unemployment rate has remained low.”

FX overview: The dollar index (KTM: USDX) off from recent high and trading in a tight range. A parallel resistance teasing the price above that an earlier triple top formation comes into the picture.
We are going to trade between a tight range between 96.50-97.20 before the data. A move above 97.20 could push further the price towards the triple top pattern formation seems between 97.50-97.70.

View: Limited headroom

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