NFP July 5, 2019 at 13:00 (GMT). Are you ready to trade?


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What to expect from NFP release?


Hello, Trader FX
 
The U.S. Nonfarm Payrolls and Unemployment Rate are out tomorrow, 

July 5, 2019, at 13:00 UK Time (GMT)

and expected to cause significant volatility in the markets.

On the first Friday of the first month of the new year, the attention of traders will be directed to a fresh package of US fundamental data on the labor market.


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
Last data: 75K
Consensus forecast: 160K

The June report will have a greater impact than usual due to the volatility of the average NFP over the past four months. 312K of new jobs in January brought a three-month offset of the average figures to 245K - the best indicator in three years. But the February's 56K, and then the May's 75K, turned out to be much lower than expected and below the average monthly level, which rather strongly added volatility to this indicator.

Non-farm payrolls is expected to increase by 160K in June, after more than modest 75K numbers in May. Private companies and firms are expected to add 153K jobs after increasing by 90K in the previous month. But employment among government servants will decrease by 15K jobs.

If this forecast is justified, then traders should expect a moderate growth of the US dollar relative to its main competitors. In case of significant excess of the projected figures, short-term volatility in the foreign exchange market is possible.

Average Hourly Earnings
Last data: 0.2%
Consensus forecast: 0.3%

We believe that the new data on the average hourly earnings on a monthly basis will grow to a level of 0.3%. Taking into account the overall rather low level of inflation in the United States, the likelihood that employees are currently feeling a real wage growth has increased.

If this forecast is justified, it will contribute positively to the American currency.

Unemployment Rate
Last data: 3.6%
Consensus forecast: 3.6%

Despite the rather volatile non-farm payrolls indicator, we believe that the US unemployment rate will remain at historic lows of 3.6%. This fact can also significantly neutralize the effect in case of weak NFP data.

If this forecast is justified, then in combination with good figures on NFP and wages, this can lead to the strengthening of the American dollar.

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.
Please do not hesitate to contact us 
with any questions in livechat
  or e-mail us at support@paxforex.com
Risk Warning:Forex and CFD trading carry a high degree of risk. As such they may not be suitable for all investors. Investors should ensure they fully understand the risks associated with CFD trading before deciding to trade. Investors may choose to seek independent advice and should not risk more than they are prepared to lose.
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