The US non-farm employment change data shows that 517K jobs were created in January. It was a surprise to the upside and exceeded the most optimistic forecast. The unemployment rate declined further to 3.4%.
This report is a surprise. An explanation is seasonal and annual benchmarking adjustments.
The question is how the FOMC views this report, likely cementing another 25bps in March.
In response, the US 10-year real rate jumped up (green arrow). FXCM's USDOLLAR basket followed its lead (red arrow). Both instruments are now trading in their bullish channels between their respective upper blue and red bands.
The longer that the bullish channels are maintained, the longer the market is seeking safety, given the upside surprise and its potential effect on Fed monetary policy.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.