300k and Above – The US stands alone in the G4 with economic indicators accelerating. That keeps the USD uptrend intact. Long USD/JPY
250k to 300K – Improvement in the US economy benefits the USD but also economies closely tied to the US outlook. The CAD may take on a higher beta to US employment growth – improvement in trade figures in recent months in Canada may have boosted optimism that the US recovery is beginning to show dividends for Canadian exporters. (Note Canadian employment, released simultaneously, may muddy the picture for CAD.) UK growth is relatively exposed to weaker Euro zone. Short GBP/CAD
200k to 250k – A result at trend is neither strong enough to lead to a repricing of FOMC expectations nor weak enough to derail the US recovery story. While we feel that the USD strengthening trend will continue into the FOMC decision in mid-September, we do not hold a strong conviction about USD price action on the back of an at-trend, at-consensus result. At consensus, we prefer to hold our highest conviction non-USD based views. Long NOK/SEK
150k to 200k – A near-term USD negative, although we would not expect expectations for a sustained US economic recovery and a more data-dependent FOMC to be derailed by a single month of below trend payroll growth. But, given the sharp dip in EUR this week and a US payrolls that does not add much to the FOMC discussion, investors largely subscribed to EUR/USD shorts may lighten up on positions. With world leaders sounding more positive on prospects for a ceasefire in Ukraine, investors may lighten up on EUR shorts ahead of the weekend. Long EUR/USD
150k or Below – A significant disappointment that leaves the market less confident in the US recovery story. Concerns about a slowdown in US employment momentum may dampen the global growth picture. Long EUR/NZD