NFP could disappoint those looking for a pivot at the Fed – TD Securities
06.10.2022, 15:34

NFP could disappoint those looking for a pivot at the Fed – TD Securities

On Friday, the US official employment report will be released. Market consensus is for an increase in payrolls of 250K. Analysts at TD Securities see another strong advance in September and warn that such a scenario would represent another disappointment for those looking for a pivot at the Federal Reserve. 

Key Quotes: 

“We look for payrolls to have continued to advance strongly in September (TD: 300k), which would represent little change vs the 315k increase registered in August. We look for this solid net gain in employment to be reflected in a decline in the UE rate to 3.6% following its unexpected 0.2pp jump to 3.7% in August.”

“Stronger payrolls would be another disappointment for those looking for a Fed pivot. USD dips are an opportunity to accumulate longs against currencies that have yet to be hit by that wrecking ball. We set our sights on CAD again. Expect EURUSD downtrend channel to remain intact, though a disappointment in payrolls could see a test above parity.”

“We think the rates market is priced for a strong report, as the terminal rate has risen to 4.5% and the market has pushed out the timing and magnitude of rate cuts.”
 

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