MUFG: The threshold for an upward surprise in non-farm payrolls is high

Odaily Odaily News: The flow of US data in recent days has not helped boost the dollar. The ISM service industry survey showed that business confidence fell more than expected after the US election in November, while the ADP employment report and the latest initial jobless claims still pointed to a weakening labor market. The market generally expected non-farm payrolls to increase by 200,000, so the threshold for an upside surprise is high. Unless there is a significant upside surprise today, we expect the Federal Reserve to cut interest rates by 25 basis points this month. If the rebound in job growth is stronger than expected, it may trigger a new upward momentum for the US dollar, helping to boost investor optimism that the US economy may strengthen after Trump won the US election and the "red tide". Conversely, if the rebound in job growth is weaker than expected, this may trigger a deeper correction in the US dollar, although we still expect the US dollar to strengthen further at the beginning of Trump's second term in the first half of next year. (Jinshi)