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NFP Misses Expectations, EUR/USD Doesn’t Pay Attention

December 4, 2020 by

EUR/USD was rising at the start of Friday’s session but reversed its movement at 10:45 GMT and backed off to trade near the opening level. For the whole week, it seemed like US nonfarm payrolls are going to be one of the major events for the week. But surprisingly, markets paid basically no attention to the report after it actually came out. One of the possible reasons for that was the fact that the data did not paint a clear picture of the US jobs market. On one hand, employment growth missed expectations by a wide margin. On the other, the unemployment rate fell more than was predicted and wage inflation showed an unexpected acceleration.

Nonfarm payrolls rose by 245k in November — just a half of the forecast increase of 480k. The previous month’s increase got a negative revision from 638k to 610k. Unemployment rate fell from 6.9% to 6.7%, below the forecast level of 6.8%. Average hourly earnings rose by 0.3%, whereas experts were expecting the same 0.1% rate of inflation as in the previous month. (Event A on the chart.)

Trade balance deficit widened from $62.1 billion in September to $63.1 billion in October but was still below the level of $64.7 billion predicted by analysts. (Event A on the chart.)

Factory orders rose by 1.0% in October, exceeding the average forecast of a 0.8% increase. The previous month’s gain got a positive revision from 1.1% to 1.3%. (Event B on the chart.)

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