The focus of the market on Friday (December 6th) will be on the upcoming US November non farm payroll report, which will be released at 21:30 today. After the impact of weather and strikes on employment data in the United States in October (with only an increase of 12000), the market generally expects a rebound in the job market in November. Expectations show that the number of new non farm jobs added in November is about 200000, which will mark a significant recovery in the job market. This report will determine whether the market continues to support the rise of the US dollar or trigger a market adjustment of long positions in the US dollar.

US dollar trend: Non farm data will determine direction

The US dollar has continued to rise in the past two months, and the market is optimistic about the outlook for the US dollar, especially with expectations for its performance in 2025. However, today's non farm payroll report may become a key point testing the long position of the US dollar. The market generally believes that the employment data for October was affected by weather and strike events, resulting in a much lower than expected actual growth rate. Therefore, the non farm payroll data for November is expected to rebound to about 200000.

If the non farm payroll in November falls below 200000, it will be seen as a signal of economic weakness, which may lead to a rise in bearish sentiment towards the US dollar in the market; On the contrary, if the data exceeds 300000, it may raise doubts in the market about the Federal Reserve's expectation of a rate cut in December, thereby supporting further appreciation of the US dollar. It is worth noting that changes in the unemployment rate are also a key factor. If the unemployment rate rises to 4.2%, the market may be inclined to believe that the Federal Reserve will take interest rate cutting measures; If the unemployment rate remains at 4.1%, it may support the US dollar and imply that the Federal Reserve will not cut interest rates in December.

Therefore, today's non farm payroll data is related to the short-term trend of the US dollar. Even if the euro rebounds yesterday, causing the US dollar index to fall below 106, the market may still be optimistic about the rise of the US dollar in the coming months.

Euro trend: short-term rebound, but risks remain

The performance of the euro/dollar is closely related to the trend of the US dollar. Yesterday, the euro/dollar rebounded slightly in the short term, mainly because the bond market believed that the risk premium of the French market had been fully priced, resulting in the yield difference between French and German treasury bond falling back to the level a few weeks ago. However, this rebound did not change the overall trend of weakness in the euro, and political risks in France did not put too much pressure on the euro.

The market's expectations for the European Central Bank are gradually adjusting, and it is expected that the ECB will only cut interest rates by 25 basis points next week, which will tilt the short-term spread towards the euro/dollar. The third quarter GDP correction data released today shows a slight increase in the eurozone economy, strengthening market support for the euro. However, the non farm payroll report will directly affect the trend of the euro/dollar. If the data is strong, the euro/dollar may face upward pressure.

Expected November employment data for the United States

1. Changes in non farm payroll in the United States in November (seasonally adjusted): The previous value was 12000, and the predicted value is 200000;

2. The average annual wage rate per hour in November in the United States: previous value of 4%, predicted value of 3.9%;

3. Changes in non farm employment of private enterprises in the United States in November: previous value -28000, forecast value 200000;

4. Changes in manufacturing employment in the United States in November (seasonally adjusted): pre-46000, forecast 28000;

5. US November unemployment rate: previous value of 4.1%, forecast value of 4.2%.

epilogue

The release of the November non farm payroll report in the United States will be a top priority for the market today. The strength of data directly determines the direction of the US dollar trend, and the market closely monitors the specific results of non farm employment data, as well as changes in unemployment rates and wage growth.