Deutsche Bank economists suggest that if the U.S. August payroll report on Friday shows an unemployment rate of 4.2% or 4.3% with job gains between 130,000 and 150,000, it would likely reinforce market expectations for a 25-basis point rate cut by the Fed on September 18.
However, if unemployment is higher or there are broader signs that the labour market is weakening rather than stabilizing, the market might anticipate a 50-basis point cut.
The economists also point out that market expectations at the start of the Fed’s pre-meeting blackout period often align with the actual rate decision.
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This article was written by Eamonn Sheridan at www.forexlive.com. Source