US NFP Watch, Consensus Analyst Estimate At 500-550k Loss ...

U.S. publishes the market mover #1 at 13:30 GMT - Non-Farm Payrolls (NFP). Analyst estimates range from 400k -750k loss according to Reuters. Similar data provided by Bloomberg, Dow Jones ... Consensus estimate is at ca. 500k-550k loss, depending on source for that.

It is assumed that employment is a lagging indicator. Assuming current global consumption mess, I doubt that a sustainable recovery of economy is possible (excluding the fiscal stimulus) before employment stabilizes...

Assuming the "ADP wild guess" on Wednesday http://blogs.wsj.com/economics/2009/01/07/adp-reports-693000-private-sector-jobs-lost-in-december/, weekly claims data yesterday, and the market reaction thereafter ... I would guess that market is prepared for ca. 700k +/- 50k cumulative loss (including the potential downward revisions for previous months). The loss (should be more than 700k cumulative?) to bring the bears out of cave ... I may be wrong!

Now at 12:30 GMT: German Bund Yields are in the range of 3.07-3.09%, DAX is slightly negative 0.14% (but with slightly positive uptrend for the last 3 hours), EUR/USD in a range of 1.367-1.372 ..

Watch out!

UPDATE @ 14:20 -14:30 GMT: Headline came with 524k Loss for current month (December estimate), previous 2 months revised down cumulative 154k Loss. So, a 678k Loss in total, that is close to my estimate for market expectations priced-in of ca. 700k Loss ...
But devil in jobless rate and average weekly earnings, can we sort this out?
First reaction is higher for equities, yields and USD ... so, probably, even worse figures were priced in? DAX @ +0.73%, Bunds yield ca.+2.5 bps, EUR/USD down some 1.60 figures (160 pips) to 1.353 ...
First euphoria fading a bit, as DAX is some 0.3% below first reaction extreme ...
US cash equities just opened little changed ...

UPDATE 2 @14:55 GMT: Equities sell off ... DAX down 1.5%, S&P500 down 2% ...

UPDATE 3 @15:30 GMT: Why markets turned at US cash equities opening? DAX (down 2.5%) underperforming S&P500 (down 2%) in the last 30 minutes. Here's a research note from BNP Paribas about payrolls: http://economic-research.bnpparibas.com/applis/www/recheco.nsf/EcoFlashByDateEN/8AA2D52CF2B6FB7FC12575390050692D/$File/EcoFlash015_english.pdf?OpenElement

UPDATE 4 @ 19:40 GMT: WSJ Real Time Economics provides a great compilation of economists views: http://blogs.wsj.com/economics/2009/01/09/economists-react-scary-employment-report/ . And one more here: http://blogs.wsj.com/economics/2009/01/09/worst-year-since-1945-with-more-pain-to-come/ . And The Big Picture has nice charts: http://www.ritholtz.com/blog/2009/01/u3-vs-u6-unemployment-data/. US Equities are slowly grinding higher from daily lows (S&P500 down 1.1% at moment), the real-time intra-day chart here at Yahoo: http://finance.yahoo.com/q/bc?t=1d&s=^GSPC&l=on&z=m&q=l&c=^ndx&c=^IXIC&c=^DJI . US 10-year treasuries yield 2.36% (close to daily lows) vs 2.50% at intra-day max 1 hour after payrolls data, USD climbs higher - EUR/USD @ 1.3425.

UPDATE 5 @ 21:10 GMT: Economist's View has more views about the data, see here: http://economistsview.typepad.com/economistsview/2009/01/the-employment.html . Equities did NOT hold to recovery "theme" and broke to daily (NEW) lows, see the intra-day chart from Yahoo. US 10-year treasuries @ 2.39%, EUR/USD @1.3430 ... Well, it may be that the better than estimated weekly jobless claims yesterday made the market too optimistic. Why markets turned down as CASH equity markets in the U.S. opened, and not earlier?

Have a nice weekend!