Leading into nonfarm payrolls the market’s attention is firmly on EUR and its resilience to downside pressure. The U.S. 10‐year is trading at 2.57; while equities are vaguely firmer and the USD is mixed. Nonfarm payrolls is the highlight today and as long as the sixmonth trend of +200k in job gains is maintained currency pricing of Fed expectations should remain in place. Consensus is calling for 215k job gains in May (see chart), with forecasts falling within a very large 110k to 350k range; the unemployment rate rising to 6.4% and hourly earnings rising to 2.0%y/y.
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Scotiabank