Wait a bit for ECB QE, watch out for upside US NFP surprises – SG

FXStreet (Barcelona) – Kit Juckes, Global Head of Currency Research at Societe Generale, forecasts the NFP to be at 275k, well above the 230k consensus, suggesting that the market should watch out for upside US NFP surprises.

Key Quotes

“NFP day is either a reason to do nothing or a reason to be long the dollar. The balance of risks favours upside surprises in US employment and wage growth data. The 6-month average increase in non-farm employment is 236k, compared to a 36-month average of 200k.”

“SG’s forecast is 275k, well above the trend and the 230k consensus. Likewise the consensus for the unemployment rate is for no change at 5.8% but the indomitable Brian Jones in our US economic steam thinks it will fall to 5.7%.”

“Finally, hourly wage growth should pick up. A 0.4% monthly increase would take wage growth from 2% to 2.1% or 2.2% depending on rounding.”

“The ECB Council did, as expected, discuss QE. Inaction yesterday wasn’t a surprise and the Euro’s bounce was very small, stories about what they will do in the New Year emerging immediately. Apparently, they don’t need unanimity for a move, though Jens Weidmann’s speech this morning at Die Zeit’s conference in Frankfurt (09:30 GMT) could be interesting. EUR/USD still doesn’t trade like a currency of which every man, trader and his or her dog is short”