What 3 events will traders be watching this week? 31 Jan- 05 Feb

This week’s 3 events will concentrate on US employment numbers. The released figures could bolster or work against the strength found in the USD since the beginning of the year. For instance, the NZD and EUR have quickly dropped in value against the USD and are currently at a multi-month low against the greenback. Depending on this week’s numbers, the GBP, CAD, and AUD, which are presently floating close to 1-month lows, may soon be joining the NZD and EUR at values not seen since mid-2020.

Wednesday and Thursday, February 02 and 03:
Wednesday: Jolts Job DEC
Thursday: ADP Employment Change JAN

Two highly anticipated precursors to Friday’s Non-farm Payrolls report are released over Wednesday and Thursday this week.

The first, the JOLTS Job Openings for December, is expected to remain close to record highs with 10.5 million jobs advertised across the US. Employers are seemingly experiencing difficulty holding onto their workforce, with job quits matching recorded highs and labour force participation struggles to budge from 40-year lows.

While the JOLTS Job Openings report is limited in its impact on forex and stocks, it does help set the tone for the following two more appreciable job reports.

The second, the ADP Employment Change for January, is estimated to report the lowest number of new jobs added to the US private sector since February 2021, with the consensus forecasting 200K. The typically slow start to the year, if forecasts are accurate, will sit in stark contrast to December’s (2021) 800K jobs, which shocked analysts who were expecting less than half this number at the end of last year.

Saturday, February 05:
Non-farm Payrolls JAN

Non-farm Payrolls JAN is forecast to report 155K jobs added to the US economy in January, representing a marked slowdown in jobs growth, but in line with what has been seen with the past few months. Last month’s report for December 2021 delivered 199K jobs, while November 2021 reported 249K jobs.

Disappointing Non-farm Payrolls may no longer have the same impact it once did, as investors appear content with the slowing job growth, and negative pressure on the USD typically fails to eventuate after such an event.

While job growth is slowing, it should be noted that wage pressure is rising, which could be a good thing for US consumer spending and optimism for the US economy in general.