Friday Fundamental Analysis of Forex Market

Forex Market for Today!

When any data is evaluated one prefers to standardize these measures by looking at the change in non-farm payrolls and number of hours worked as a year-on-year percentage change.
This way it lines up with the percentage change in average hourly earnings. More importantly, it allows us to calculate total labor income, which is the total number of people working multiplied by the average number of hours multiplied by their average hourly earnings.

As the labor market has tightened, a few subtle shifts have happened within the labor market. Despite February’s strong employment gains, overall, the pace of hiring has slowed moderately. In 2014, the total number of people working grew by 2.2%. In recent months that growth rate has fallen to around 1.4-1.6%. Daily Forex Signals
Additionally, average hourly earnings have perked up but again, not by much. From 2010 until 2015 they rose at around 2% per year. Starting in early 2016 they accelerated to around 2.6% year on year. They remain well below the 3.0-3.5% pre-crisis pace.

Talking about NFP:

Good news for many fortune-seeking analysts because average hourly earnings rose this month – by a good 0.3% month-over-month, no less. They are not too confident about the prospects of another blow out jobs figure, however.
After last month’s 313,000 print, this time analysts are expecting to see a more modest 190,000 increase in non-farm employment. If correct, this will still be considered a decent number overall, unless earnings disappoint expectations again. The unemployment rate is seen falling further to 4.0% from the current 4.1%.
Employment releases preceding Friday’s official jobs data have shown a mixed picture overall. The ADP private sector employment report came out better than expected, continuing the recent trend.
It revealed a solid 241,000 private jobs added in March against a prior forecast of around 208,000. ADP report is typically not a very accurate pre-indicator of the official NFP jobs data from the US Labor Department, and sometimes even misses the mark dramatically.

More Job opportunities in the US likely to rise:

After five months of 4.1% prints for the unemployment rate, analysts expect it to break the recent trend and fall to 4.0%. However, much of this hinges on expectations for the labor force participation rate to decelerate after February’s surprise 0.3pp jump to 63.0%, its largest increase since April 2010.
In the past 20 years, there have only been three increases in the civilian labor force this large, each followed by a decline in the next month — suggesting analysts may be correct to expect a pullback.
Analysts expect a significantly stronger 0.3% month/month gain in average hourly earnings than the whisper number, which expects another modest 0.1% gain. In the past eight months, analysts have shown a slight tendency to overestimate
The February payroll gain surprised analysts and markets, pushing analysts to vary their expectations on how strong March payrolls will be. The low estimate by analysts is a muted 130k gain, while the high estimate sees a strong 250k rise, with the median forecast coming in at 195k.
In the last 20 years, the March payrolls have come in softer than the median analyst’s expectation 12 times. The average overestimate in the last 20 years is 91k, while the average underestimate is only 51k.

Jobs in Canada to raise nearly sooner:

Analysts expect March employment to increase by 15,000, keeping it same as the 15,400 gain recorded in February. Forecasts range from 10,000 to 25,000. A 15,000 employment gain would put the first quarter monthly average at -19,200, owing to January’s 88,000 drops that was all part-time driven. The unemployment rate is expected to remain stable at 5.8%, with a forecast range of 5.7% to 6.1%.
The steady pace of job creations would be in line with analysts’ expectations of a slowing growth momentum. Still, it would continue to reflect the ongoing absorption of labor market slack that could translate into a pickup in the 12-month hourly wage growth for permanent workers from 3.1% in February. With underlying inflation continuing to pick up, the wage trend remains high on the radar of the Bank of Canada.
The youth participation rate, which remained stable at 65.5% in February, will also be worth watching. In particular, BOC Governor Stephen Poloz is still not satisfied with the youth participation rate, which edged down 0.1 percentage point to 63.5% in February, the lowest since September 2017.

This news was all for today. Stay updated on our website for further stock and trading related news.

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