Be Careful, Don't Just Enter Before the NFP, Check Out the Predictions!
Released US economic data indicates the economy remains quite strong. JOLTS (job openings) rose and layoffs fell, while the ISM manufacturing index also improved. This means companies still need workers and business activity hasn't weakened significantly, so the market tends to believe the Fed doesn't need to rush to cut interest rates.
Today, there's the ISM Services PMI (service sector). This is important because the service sector is large in the US. If the ISM Services rises or meets expectations, especially if the Employment component also rises, it usually increases the chances of a strong NFP on Friday. If the ISM Services falls, especially if Employment falls, the chances of a weaker NFP increase. But remember: this is just a hint, not a certainty.
According to Newsmaker, the NFP tends not to be bad, more like "still strong but not explosive." The main risk isn't a plummeting NFP, but rather a strong NFP that makes the market increasingly confident that interest rates will remain high for longer or even rise.
Market impact: If the NFP is strong, the dollar usually rises, gold falls (because yields rise and gold is interest-free), and oil can also benefit (a sign of still strong demand), although oil remains the most sensitive to geopolitical headlines. If the NFP is weak, the dollar usually weakens, gold gets a boost, and oil can be pressured by demand concerns, although the decline could be limited if Middle East supply risks remain high.
The most important thing to monitor on Friday is not just the NFP figure, but also unemployment and wages. If wages remain high, the market could remain hawkish even if the NFP is not particularly strong. (asd)*
Source: Newsmaker.id
