NFP is coming. Are you ready?

NFP is coming. Are you ready?
The U.S. Nonfarm Payrolls and Unemployment Rate are out tomorrow, 

October 5, 2018, at 13:30 UK Time (GMT +1)

and expected to cause significant volatility in the markets.

An economic indicator that tends to trigger sharp market movements
in the minutes leading up to its release and afterwards, the NFP is released by the U.S. Department of Labor on the first Friday of each month, outlining changes in the number of employees, excluding farm workers and those employed by the government, non-profit organisations and private households.


What to expect this month:

NonFarm Payrolls
185K Consensus;
201K Previous 
We expect that in September the volume of employment in the US non-farm sector will show an increase of 185 thousand new jobs. This is less than the previous figure, but, nevertheless, these figures also indicate a very good "health" of the American economy.

Despite protests from the liberal public, the duties imposed by President Trump on a number of countries contribute to the creation of a fairly large number of new jobs within the country. Most likely, this trend will continue 
in the coming months.

The long-term strengthening of the US currency is likely to continue, 
and if this forecast is justified, this will contribute to the short-term growth 
of the US currency in the Forex market.


Average Hourly Earnings
0.3% Consensus;
0.4% Previous 

Investors are also closely monitoring such an important indicator as Average Hourly Earnings. Despite the fact that according to the consensus forecast, 
a slight decrease of this indicator is expected - up to 0.3%, analysts are inclined to consider this a temporary phenomenon. Indirectly, the indicator was influenced by Hurricane Florence, which hit the states of North and South Carolina.

If the forecast is justified, then this probably will not have a negative impact on the US currency.

Unemployment Rate
3.8% Consensus;
3.9% Previous
Another key indicator in the new release could be the Unemployment Rate. According to the forecast, we expect it to decline to 3.8%, aided by strong data on the stability of job growth in general, and on the fundamental data 
of the American economy, demonstrating a steady positive development.

If this forecast is justified, then we can expect a rally in all pairs with 
the US dollar, especially in combination with the NFP forecast for the number of new jobs.


To keep your open positions and survive during the time of market volatility due to news release, make sure you have enough funds in your account.


Keep in mind:
  • During the NFP announcement, expect high volatility, especially across USD pairs.
  • Market sentiment can really affect currency movements. What traders expect from the report has as much impact as the actual released data, if not greater.
  • A higher figure than the one registered during the previous month signifies an improvement in employment numbers. This, as well as the release of a higher-than-expected figure, means an increase in the number of jobs created and are positive for both the U.S. economy and the dollar.
  • A lower figure than the one registered during the previous month, as well as a lower-than-expected figure, usually have a negative impact on the dollar as they demonstrate a drop in employment numbers.
  • Remember that the sudden spike observed across the charts of many currency pairs upon the release of the NFPs is usually followed by a period during which the market tries to recover and return to its initial price levels.


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