The US jobs report is due to be released at 1230 GMT
- Prior +224k
- Median estimate +165k
- Highest estimate +224k
- Lowest estimate +74k
- Standard deviation 22.2k
- Unemployment rate estimate 3.6% (prior 3.7%)
- Participation rate estimate 62.9% (prior 62.9%)
- Average hourly earnings estimate +0.2% m/m (prior +0.2%)
- Average hourly earnings estimate +3.1% y/y (prior +3.1%)
The key element that markets are searching for in the report here is consistency. After several months of fluctuating back and forth between a solid headline print and a sub-100k print, a more sturdy release will do well to keep markets from cowering with fear (any more than they already have after Trump's tariffs announcement).
The general undertone going into the report was initially overshadowed by the Fed and with Powell pointing to data dependency as the next step, a more solid labour market report will definitely do the dollar no harm to wrap up the week.
However, with Trump's tariffs announcement yesterday, markets are looking more nervous and cautious. As such, this will take away some of the impact that the release here might have towards overall sentiment that is flowing through markets right now.
Given that, a poor headline reading (<100k) along with poor accompanying details (especially wages) has the potential to push further negative risk tones in markets. In such a scenario, the yen and franc would be the major beneficiaries once again.
As for a more solid headline reading, I don't see it as being a massive push factor for the dollar to gain. I reckon any sustained dollar move will be tied more closely to wages data as that will play into sentiment surrounding Fed expectations on the inflation outlook.
Alternatively, a more steady report with readings close to estimates could easily see this being passed up by markets as a non-event. As mentioned above, the underlying theme in markets is siding towards being more risk averse. I don't think a report that doesn't offer much is going to change that ahead of the weekend.
