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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive Summary
- Nonfarm payrolls are expected to moderate further in July after the slight beat in June was more than offset by large negative revisions to the prior two months.
- Hurricane Beryl is likely to have the largest impact on the establishment survey, clouding the underlying trends with expected negative impacts on payrolls and hours worked but some upside for AHE growth.
- This hurricane impact adds asymmetrical risk to reaction in payrolls surprises: a 20-30k miss could easily be faded whilst a beat would be an outright positive surprise. Revisions will be particularly important.
- The unemployment rate is seen rounding to 4.1% for a second month in July but it can easily round down to 4.0% after the 4.05% in June.
- A 4.10% reading would leave the u/e rate fractionally short of triggering the Sahm rule, although Powell looked to play this down on Wednesday.
- An upside surprise would be particularly dovish as it would already see the unemployment rate at a level that the median FOMC participant forecast for end-2025 as recently as June.
- A first cut in September is still more than fully priced, implying more than 10% odds of a 50bp cut. For the latter to really gain ground we think we’d need to see both a lift in the unemployment rate and a further moderation in core inflation. There is an additional payrolls report and two CPI reports before Sept 18.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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