US non-farm payroll employment is once again a major focus today. Markets are expecting 621k job growth in May. Unemployment rate is expected to drop from 6.1% to 5.9%. Average hourly earnings are expected to grow 0.2% mom.
Looking at related data, ADP private jobs grew a massive 978k in the month. More importantly, growth was quite evenly distribution among small, mid, and large companies. Four-week moving average of initial jobless claims dropped sharply from 612k to 428k. However, ISM manufacturing employment dropped notably from 55.1 to 50.9. ISM services employment also dropped from 58.8 to 55.3. There is still room for disappointment considering the relatively high expectations on the NFP numbers.
Dollar staged a strong and broad based rebound overnight. The Dollar index look set to start the third leg of the consolidation pattern from 89.20. Yet, we’d need to see firm break of 90.90 resistance, as well as sustained trading above 55 day EMA to confirm. In that case, stronger rise should follow towards 93.43 resistance in the next few months. However, failure to do so would keep near term outlook bearish for at least another take on 89.20 low.
