USD reaction to NFP to be contained ahead of US CPI next week – MUFG
10.03.2023, 12:15

USD reaction to NFP to be contained ahead of US CPI next week – MUFG

Nonfarm Payrolls report is in focus ahead of the US Consumer Price Index (CPI) data next week. Economists at MUFG Bank analyze how these two pieces of economic data could impact yields and the Dollar.

Jobs data in focus but CPI data next week may contain moves

“With nearly 40 bps now priced for this month’s FOMC meeting, a strong report today will add to upward pressure on yields although the data would have to be very strong to see the market move to close to fully pricing 50 bps, simply because we will still have the CPI data next week and a strong jobs report coupled with a weak CPI report would probably be enough to keep the FOMC at the current pace of 25 bps hikes.”

“Given the elevated pick-up in yields over recent weeks, and the notable drop back in yields today on the back of increased risk aversion, we would be surprised to see a jobs report that would be strong enough to see another big jump in yields. That could mean some further softening of the Dollar versus core G10 but moves are unlikely to be substantial ahead of CPI unless there’s a considerable off-consensus print in either direction.”

See – NFP Preview: Forecasts from 10 major banks, many new jobs created

 

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