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British Pound Sterling has risen Violently as the Tories have won a resounding...a truly resounding... victory

08 May 2015 Written by 

The GBP responded very positively to the news and on average it has risen over 300 pip in every pairs , we expect a minor profit taking pullback and then a resumption on the upward move . This would be a profit taking opportunity to all those who are short the GBP for month and a Great opportunity to BUY the GBP.

 

This is of course "Employment Situation Report" Friday and anything ...or everything... one says prior to the release of that comically revised and revisable number can appear quite foolish... or fortunately prescient as the case may be. 
Wednesday's ADP report send everyone responsible for a guess on today's number back to their computers and models, revising theirprevious guesses downward. In preparation for today's report and in anticipation of it, yesterday's weekly jobless claims were 265 thousand, down from a newly downward revised 262 thousand the week previous and hovering both weeks at multi-year lows. However, before one takes these two numbers and extrapolates them into a wondrously good number in today's non-farm payrolls we must needs remember that the week in question for today's payrolls figure was that of April 18th and that week's jobless claims was a rather rough 295,000. 
Too, the most recent Gallup polling groups report on employment was decent... not great, but it was ok... coming in at 43.9 where it has been effectively anchored since the start of this year. 
Finally, in preparation for today's report, we note that the Challenger "Announced layoff" report showed a rather sharp rise in the number of layoffs, rising to just over 61 thousand from 36.5 thousand last month.
However, nearly all of those layoffs were in the oil sector, and that is expected . 
All of that said, the consensus regarding today's Employment report and the non-farm component is that there is no consensus! The range of estimates on The Street is abnormally... almost psychotically... large, ranging from +175 thousand on the low end to +330 thousand on the high end.
We do expect the unemployment rate to fall from last month's 5.5%, but only to perhaps 5.4%. We look for the average work week to perhaps rise marginally from last month's 34.5 hours to 34.6 and we look for average hourly earnings to be up 0.2 or perhaps 0.3%. But as for non-farm payrolls we'll suggest something close to 200 thousand, accepting anything between 160-240 thousand as a bull's eye's hit.

 

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