Nonfarm payrolls preview NFP Falling wage growth may weigh on US Dollar, support Gold
The US Dollar kicked August off with gains, while Gold and stocks suffered. Is it reaching an end?
Nonfarm Payrolls are expected to show an increase of 200,000 positions in July, similar to 209,000 in June. That is what the calendar shows, but ADP, America’s largest payrolls provider, reported a leap of 324,000 private-sector jobs last month – raising real projections. High expectations = higher chance of disappointment.
Even if America saw a strong month of gains, there is another thing to watch – Average Hourly Earnings. Expectations stand at 0.3% MoM, slower than 0.4% last month, and 4.2% YoY, below 4.4% previously. Here, expectations do not seem too high. Nevertheless, all inflation-related figures have been declining recently. Another sign that price rises – impacted by wage gains – are falling, would be welcome by investors.
If my analysis is correct, the US Dollar would retreat, while Gold and stocks would rise.