US non-farm payroll report will be the major focus today, as it’s a crucial factor to Fed’s rate decision later in the month. For now, fed funds futures are still pricing in 100% chance of a rate cut on July 31, with 30.7% chance of 50bps cut. The pricing suggests that even a set of strong job data today won’t deter Fed’s cut. But a set of weak number would solidifies it. At least, this seems to be what the traders think.
Looking at other job related data, ADP employment rebounded in June and grew 102k. ISM Manufacturing Employment rose from 53.7 to 54.5. ISM Non-Manufacturing Employment dropped from 58.1 to 55.0. Four-week moving average of initial jobless claims dropped rose slightly from 215k to 222k. Conference Board Consumer Confidence dropped from131.3 to 121.5, lowest since September 2017.
As for NFP, markets are expecting 164k growth in June. Unemployment rate is expected to be unchanged at 3.6%. Average hourly earnings are expected to rise 0.3% mom. Dollar could suffer some heavy selloff on downside surprises today. But reactions to upside surprise are relatively uncertain.
Some previews here.
