The NFP report will be somewhat backward-looking compared to the initial jobless claims report. As such, much like the AFP report, expectations are for a modest contraction in the headline figure. Keep in mind that the NFP report is from the week of March 8-14th. In turn, with the first notable lockdown orders taking place from March 20th in California with other states reporting lockdown procedures shortly after. The full extent of the coronavirus is unlikely to show up until next month’s reading, which will also have revisions for March.
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A smaller than expected drop in the headline figure may provide some mild reprieve for high beta currencies such as the AUD and NZD. However, it is also important to note that focus will also be on the unemployment figure, which is expected to jump to 3.8% from 3.5%, while wage growth is seen slowing both on the monthly and yearly figures. That said, a notably weak NFP report could see the Japanese Yen push higher, although, as the data is lagging, we expect the impact to be relatively muted on the whole, with greater focus now on the jobless claims figures in the weeks ahead, given that it is the most up-to-date economic indicator.