US labor data likely to surprise to upside

The US labour market report is scheduled to release today. The labor market data is quite important for the Fed, as its policy revision will be depends on today's data.

Following slightly disappointing ADP data (+185k), an outcome near the consensus (225k new jobs) should be enough to prop up the USD, says Commerzbank. As the markets are quite nervous, any surprise - regardless of whether it is positive or negative - will lead to considerable FX volatility. And do not forget the wage data. 

From the Fed's vantage point, inflation is still too moderate. It expects that wages will rise on the back of the good employment situation. In that case, the Fed can be sure that a rate hike will not trigger deflationary tendencies. 

Commerzbank argues, "We believe that the labour market figures are more likely to surprise to the upside than to the downside. If our forecast materialises, EUR/USD will certainly attack the support just above 1.08 again."