Non-Farm Payrolls before FOMC

Later today, the US economy will be releasing key employment data well known as Non-farm payroll (NFP). Market is expecting the US economy to have added 191,000 jobs in February which is an upward revision from the previous month (151,000). Unemployment is expected to remain unchanged at 4.9% which is eight years low and most importantly, Average hourly earnings is expected to fall back to 0.2% from 0.5% from the previous month.

Considering major economic data that was released earlier in the week, market could be a bit bullish on the US jobs data for February because most data were stronger than expected while some missed expectation. ISM Manufacturing figures was 49.5 beating expectation of 48.5, ISM Non-Manufacturing figure also came at 53.4 above markets expectation of 53.2, ADP Nonfarm employment was also positive at  214,000 against 190,000 expected. Services pmi and Factory Orders all missed expectations at 49.7 and 1.6% consecutively.

A strong NFP today will see USD bulls return back to the market in anticipation for a possible US interest rate hike later in March from the Federal Reserve. One important instrument to watch is Gold. Gold touched $1268 yesterday on the back of weak USD. If NFP should miss expectation, we might see a strong rally on gold to test the February 2015 high at $1285.

However, USD bulls and bears should not be too excited regardless of the NFP outcome. Next week is the ECB meeting and Mario Draghi is expected to introduce some policy measures to rescue the Eurozone economy from Deflation. Many analysts are expecting more stimulus package but he might disappoint the market just like he did in December