Shinobi - Waiting for Norfarm after accumulating . BUY or SELL
In its most recent meeting, the Fed embraced a data-dependent approach when making future decisions and evaluating the broader normalization outlook. This flexible guidance has diminished the probability of further policy firming in 2023, but changes in the macroeconomic landscape could prompt a reassessment of the current tightening roadmap.
For example, if job growth exceeds estimates by a wide margin, interest rate expectations may shift in a more hawkish direction, with traders discounting another quarter-point hike in the fall for fear that robust hiring during tight labor market conditions could drive up wages and exert upward pressure on inflation. That said, any NFP reading above 300,000 would likely bolster the U.S. dollar, weighing on EUR/USD but providing support to USD/JPY.
On the other hand, weak employment gains may trigger the opposite outcome. For instance, a soft report could raise concerns about the state of the economy, setting the stage for lower yields and a weaker U.S. dollar. An NFP figure below 100,000 could make this scenario more likely.
For example, if job growth exceeds estimates by a wide margin, interest rate expectations may shift in a more hawkish direction, with traders discounting another quarter-point hike in the fall for fear that robust hiring during tight labor market conditions could drive up wages and exert upward pressure on inflation. That said, any NFP reading above 300,000 would likely bolster the U.S. dollar, weighing on EUR/USD but providing support to USD/JPY.
On the other hand, weak employment gains may trigger the opposite outcome. For instance, a soft report could raise concerns about the state of the economy, setting the stage for lower yields and a weaker U.S. dollar. An NFP figure below 100,000 could make this scenario more likely.
Note
The Federal Reserve, which is gearing up for its annual symposium from August 24 to 26 in Jackson Hole, Wyoming, will likely see signs the Central Bank is nearing an end to raising wages.
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.