After growing at the end of the last week, the main currency pair got stabilized on Monday; investors took a break.
The EUR/USD pair starts consolidating: the mixed statistics published by the USA last Friday is already included into the prices, and no significant news is expected until Thursday, when the ECB is planning to have another meeting. The current quote for the instrument is 1.1270 and it’s the highest level since the middle of November 2016.
May reports on the USA employment market were rather mixed. The Unemployment Rate decreased up to 4.3%, which is the lowest over the last 16 years. Everything is pretty fine, but the report components showed that the indicator decreased due to the he labor force participation rate (-0.2%, 62.7% total). The Non-Farm Payrolls in May expanded by 138K against the expected reading of 182K.
The Average Hourly Earnings continues increasing steadily: in May, it added only 0.2% m/m (2.5% y/y). It’s not as much as one wanted and such weak growth may later influence both the employment market and the Fed’s decisions.
It wouldn’t be fair to say that the report was very disappointing. The NFP indicator just can’t always increase quickly, because it may result in a “bubble” and lost productivity. Most likely, the numbers to be published in June will be better and will calm the market down.
The employment market statistics is very important as we approach the Fed’s June meeting. At the moment, the CME futures are showing that investors’ expectations of the rate increase this month are 91.2%.
RoboForex Analytical Department