NFP Quick Analysis: When The Commander In Chief Leaks, The Dollar Does Not Need The Data

This article originally appeared on FXStreet.

• US President Donald Trump tweeted an optimistic tweet ahead of the NFP.
• The tweet triggered a mini "buy the rumor, sell the fact."
• The USD remains supported, and any possible doubts about a hike have diminished.

US President Donald Trump tweeted that he is looking forward to seeing the employment numbers, 69 minutes ahead of the publication at 8:30 Eastern Time (12:30 GMT). Before becoming the Commander in Chief, Trump had a clear tendency of only tweeting about flattering polls, never about not-so-great ones. The same trend continued in the Oval Office. 

The tweet gave a boost to the US Dollar and US yields ahead of the data. The actual data was indeed upbeat: 223,000 jobs gained against 188,000 expected. Wages are up 0.3 percent MoM, also above 0.2 percent predicted while they moved up 2.7 percent YoY from 2.6 percent, as expected. 

The unemployment rate, which matters politically (but less so to markets), surprised by digging the bottom with 3.8 percent, better than 3.9 percent seen in April and expected. This came alongside a drop in the participation rate from 62.8 percent to 62.7 percent, which takes the sting out of the fall in the jobless rate, but Trump took the sting out of the event as well.

The reaction was quite muted the US Dollar strengthened just a bit, then retreated and then stabilized. 

Trump's next pre-data tweets will be watched closely.

Apart from Trump, the data is genuinely positive. The Federal Reserve had already told us that they intend to raise rates in the upcoming meeting in less than two weeks. If anybody had the slightest of doubts, the upbeat figures on all fronts would eliminate them.

The bigger question for the Fed is: will they hike in September? And for the broader markets, the focus returns to Trump: How far will the trade wars go?

We will know the answers soon enough.