The wage-trade is the gift that keeps on giving
Wages overshadow jobs once again
For more than a year the nonfarm payrolls trade has been to ignore jobs growth and focus on wages.
Once again today it paid. The US dollar hit session highs on the jobs headline but quickly turned around and hit session lows because wages were soft.
"The playbook for the past year has been to ignore the jobs headline and unemployment rates. Instead focus on wages, hours worked or anything else that will play into inflation. It will be the same on Friday," We wrote in the jobs preview.
It wasn't a huge trade but fading the initial dollar jump paid around 30 pips on every cross.