January NFP expectations: Major Banks perspective (+technical analysis)

January NFP expectations: NFP to increase less than 200K for a second straight month, the unemployment rate to hold at 4.7% and hourly earnings to slow to 2.8%.

2 February, AtoZForex  Non-farm Payrolls (NFP) deals with the change in the number of people employed during the previous month, excluding the farming sector. The job creation is the foremost indicator of consumer spending, which accounts for most economic movement. A higher than predictable reading should be taken as bullish for the USD, while a lesser than expected reading should be taken as bearish for the USD.

January NFP expectations

Mixed expectations surrounding the U.S. Non-Farm Payrolls (NFP) report may generate an uneven market reaction. Moreover, the economy is probably to add 175K jobs in January. Yet, with Fed Fund Futures still pricing a better than 60% for a June rate hike, a series of positive developments may heighten the demand for the greenback.


Improved confidence in the increase in business outputs may generate a better NFP report. Hence, a positive development may generate a bullish reaction in the U.S. dollar.


The slowdown in private sector consumption may drag on job and wage growth in the US. The fading outlook for the U.S. labor market may offshoot losses for the greenback.


What To Expect From NFP? – Views From Major Banks

Goldman Sachs expectations:

We expect a January non-farm payrolls print of 200k (consensus +175k, last +156k). We also expect the unemployment rate to fall one-tenth to 4.6% − which would mark a return to the cycle low – in part driven by reduced year-end retail layoffs. It is expected that the average hourly earnings to rise 0.3% month over month and 2.8% year over year reflecting firming wage growth and state-level minimum wage hikes.

Barclays expectations:

Our forecast for non-farm payroll to have increased 175k in January, a pick-up from the December slowdown. We forecast for the unemployment rate to decline one tenth to 4.6%. We expect average hourly earnings to increase 0.3% m/m and for the average weekly hours to be unchanged at 34.3.

SEB expectations:

We forecast 175k for total payroll growth, 167k on private payrolls, 4.7% on the unemployment rate and 0.3% on average hourly earnings.

How to trade currency pairs?

AtoZ Forex market analyst, Chrysanthos Demetriou shared his EURUSD analysis ahead of the NFP data:

From the technical analysis perspective, EURUSD is trading below 100SMA on the 1H chart with 20SMA sloping in a bearish direction. Key levels into NFP are 1.0690-1.0710 area. A break below this area will open the door to 1.0660 and 1.0620 level accordingly. On the upside, we have 1.0828 level which was yesterday’s highs, a break above we will see 1.0850 level.

nfp-technical EURUSD-H1 Technical analysis, SMA100 & SMA20 (click to zoom)


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