Forex Flash: FX positioning for a strong NFP reading, risk of disappointment – TD Securities

FXstreet.com (Barcelona) - Nonfarm payrolls will be the focus of the day: "We think that the positive momentum in jobs creation in Q4 will extend into 2013 with a further 154K jobs added in January (mkt 165K)", wrote analyst Tim Davis, expecting private sector employment growth to remain at a relatively brisk 164K pace, bringing the 4-month average to 168K, which will be the highest print on this indicator since April. "Employment in the goods producing sector should remain de-cent, adding to the brisk gains in the service sector", he added.

TD Securities analysts see the market positioning for a strong headline number: "This suggests a high probability of a disappointment, which could trigger a reassessment on the economic outlook, possibly resulting in some retracement of the recent sell-off", said Davis, pointing to a less important ISM manufacturing PMI this time, overshadowed by the NFP.