Nonfarm Payrolls Preview

The monthly release of US employment figure has turned less spectacular lately, with the exception of May shockingly negative readings. The sector has been growing steadily for already two years, being the less of the concerns for the FED, which bases its decision of rising rates in employment and inflation levels. Basically, with a healthy job's sector, the problem for the Central Bank has been persistent low inflation.

But Janet Yellen's opening remarks at Jackson Hole have been quite a game changer in this scenario, as seems that policymakers are ready to pull the trigger, in spite of still subdued inflation. Things, however, are not that clear yet: many market analyst believe is way too bold to call for a rate hike in September, and that with luck, we will see one in December. That "luck" depends on how macroeconomic data coming from the US results during the upcoming weeks.

The greenback rallies on good news, retreats on bad ones, all based on hopes over such rate hike, which by the way, the FED promised a couple of years ago, and keeps us all hoping. That's why this time, the US Nonfarm Payroll report grabs more attention, and may result in a bigger market mover.

Market's expectations are of 180K new jobs added in July, which is around this 2016 average gain of 186K. Unemployment rate is expected to tick back lower to 4.8%, from previous 4.9%. Year-on-year wages growth has fluctuated above 2% for the last four years, slowly grinding higher, but not enough to become a factor, when it comes to fueling consumption, and therefore inflation. In fact, and monthly basis, average hourly earnings are expected to have grow by 0.2% against previous 0.3%.

With headline employment creation and unemployment figures in line with expectations, market's attention will center in wages. Improvements there could be more motivating for dollar's bulls than a modest miss in added jobs. A generalized miss, will dilute for good chances of a rate hike in September, and probably trigger a dollar's sell-off.