US NFP: The next big important thing – BBH

By FXStreet FXStreet (Delhi) – Research Team at BBH, suggests that it is difficult to envision pendulum of expectation swinging much harder against the Fed and the US January employment report on February 5 is important.

Key Quotes

“Given the recent averages, it is unreasonable to expect that job growth exceeded December’s 292k. The consensus is around 190k though we suspect the risk is on the downside. Provided the surprise is not significant, attention can focus on the details. There is a chance the unemployment rate cut tick down to 4.9%, a new cyclical low.

Hourly earnings is also important. The problem here is the base effect. Last January hourly earnings rose 0.6%, and this will drop out of the year-over-year reading. Hourly earnings rose 1.8% in 2014 and 2.5% in 2015. In January, hourly earnings likely by 0.3%, which is a little above the 12- and 24-month average, but the year-over-year rate will fall back to 2.2%.

The employment data may also help quiet those who think the US is in a recession. Well-known hedge fund managers have been critical of the Fed’s hike, and at least one has forecast QE4. A …read more

Source:: FX Street