Fed Rate hike decision: The latest commentary from Fed officials have suggested that a June interest rate hike is now unlikely but a move in September remains on the cards providing the data shows economic growth rebounding from its Q1 fall.
This week's economic data have so far mostly been consistent with a decent pickup and markets will be watching closely to see if that is also true of payrolls.
Unemployment reports: Today's payrolls report will be observed as probably the first indicator for June month. Indeed, the Fed's identification of further labour market improvement as one of the key preconditions for a hike in interest rates has, if anything increased its importance. The forecast of unemployment rate is stood unchanged from previous 5.4%.
Most alternative indicators suggest that the labour market has continued to tighten in May. In particular, initial jobless claims fell to a new recovery low.
We expect a 230k rise in employment, which would be the largest since February, while the unemployment rate is forecast to be stable at 5.4%, and earnings growth is expected to pick up modestly to 2.3%.
Trade bets:
Short ITM digital calls of USD/CAD at strike 1.2360 for net credit of .
The target is spot rate at 1.2482 levels. Extract only intraday leverage effects or square off position not to be rolled over.
Margins requied for shorting calls.