Monday, October 3, 2011

BMO Capital Trading Recommendations Ahead of NFP

US September Non-Farm Payrolls data is released on Friday, October 7, at 12:30 pm GMT. The figures will be watched more than ever after US jobs growth stagnated in August.

Analysts at Bank of America Merrill Lynch expect to see the figure of 75,000, but warn that the risk is to the downside.

Strategists at BMO Capital say that if the market expects NFP to be somewhere close to 50,000 and the indicator posts 70,000, one should sell USD/CAD. If the published NFP figure finds itself between 70,000 and 30,000, it would be better to refrain from actions. If the figure comes below under 30,000, the specialists recommend buying the greenback versus Swedish krona.

According to BMO, the first scenario is the most likely. As a result, the specialists advise investors to sell US dollar versus its Canadian counterpart at 1.0400 stopping just above 1.0470 and targeting 1.0155.

At the same time, economists at J.P. Morgan point out that investors need to be cautious with trade like this watching other data released on Friday – Canadian nonfarm payrolls and Ivey PMI survey.

daily usdcad 18-51
Chart. Daily USD/CAD

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