Ahead Of The Non-farm Payroll- It Could Be A Big Number

Ahead of a very important day of macro-economic releases from the U.S., and ahead of the Non-farm Payroll numbers on Friday, major forex pairs have struggled to break through Swing Point R1 and S1 areas in European trade. The long side of global equities allowed a short-Usd move to be put in place overnight, but the cash markets were not able to easily hold the positive momentum built up in the futures market, after a move higher from Wall Street.

Forex price action is revealing an obvious reluctance from speculative interest encamped on the long side of the Usd to give up ground too easily. It is also clear to see that the momentum unleashed as each global trading region opens and closes is just not backed with enough volume to break new ground on stocks, and is allowing only tentative move in forex to test dollar index support areas.

Ahead of the 08:15 ET ADP and 08:30 ET Weekly Jobless Claim numbers the markets may just consolidate recent moves. The 10:00 ET ISM numbers will then trigger equity direction, just in time to affect the European market close. The impact of a potentially large NFP number on Friday, because of the farcical way that the survey is completed, in what is obviously a jobless U.S. recovery, will weigh heavily on equity and forex sentiment.

ZeroHedge.com has covered the potential for a 700k read on NFP numbers, however staggering that number is, the BLS think it has merits:

This Friday the NFP report from the BLS could easily surpass 700,000 people, driven primarily by temporary census hirings and by Birth/Death adjustments. The Census Bureau reported that between the weeks of May 9 and May 15, there were 573,779 employed census workers. In the prior month, for the week ended April 17, there were 156,335 census workers employed, or a differential of 417,444 newly hired census workers between April and May.

Keep in mind that in the May NFP report, the benefit from census workers was at 66,000, or 90,335 less than the Census reported number. As a result, due to the BLS' voodoo math and double counting, its is distinctly possible that the Census alone will add up to 507,779 workers (organic hirings of 417k and the plug for the prior period of 90k). Also, recall that the Birth-Death adjustment in April "added" another 188,000 workers. Retaining the same level of statistical adjustment, and the May NFP number will be at 700,000 before even one real full-time person has been added to the economy in the month of May!

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