Non-farm payrolls
Discover what the non-farm payrolls report is – including
the date of the next release, and why
it’s important to traders.
Traders are looking forward to Friday’s jobs report, yet will we see volatility for this event like months gone by? With the dollar approaching a crucial resistance level, traders are hoping this event will provide direction going forward.
Markets are gearing themselves up for Friday’s US non-farm payrolls (NFP) jobs report as they normally do, with many traders reducing their market exposure in anticipation of volatility, and others preparing to trade the aftermath of the release. However, this month seems somewhat different from many that have gone before due to a number of factors. Anyone following financial markets will have noticed the constant raft of geopolitical factors affecting market sentiment. For one thing, we have seen US President Donald Trump raise the possibility of a host of drastic risk events, with the heightened chance of a nuclear war with North Korea, and the possibility of a trade war between the US and China. While we have seen some improvements to both stories, we remain within a period where the landscape is changing from one day to the next. This constant shifting on such huge issues has obviously grabbed a lot of market attention, leaving many of the major economic releases seeming like small fry when compared with a nuclear war or all-out trade war.
Discover what the non-farm payrolls report is – including
the date of the next release, and why
it’s important to traders.
On the other side we have the fact that the US economic picture looks relatively stable, with the Federal Open Market Committee (FOMC) monetary policy outlook looking relatively predictable. The next meeting in less than three weeks comes with a market expectation of a 100% chance that the committee will raise rates. There is little chance this week’s jobs report will shift that figure much at this point. That being said, there is only one direction such a shift could occur within, pointing towards the potential volatility being heavily skewed in favour of a very weak figure. Looking at today’s ADP payrolls figure, we saw an eight-month low, with the previous month revised to even lower than that.
On the market front, the US Dollar Index has been rallying heavily over the past two months. This could be a bullish resurgence following a year to forget in 2017. However, the key to this bullish resurgence is a break through 9493. Until then, we are at a crucial crossroads and traders will be looking towards Friday’s jobs report as a source of volatility, which could see us either reverse lower or break through that key resistance level.
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