Jump to content

What are your predictions for non-farm payrolls?


Recommended Posts

This week’s feature will revolve around the U.S. non-farm payroll figures which are expected on Friday 6th October at 13.30 pm London time. Over the course of the week we will post trade ideas and articles surrounding the data release, but we’re curious what IG Community members are thinking.

 

  • What is your NFP prediction?
  • Why is this your prediction?
  • How will you trade over the announcement?

 

What is Non-farm Payrolls?

NFP is a macro economic data release which shows the monthly change in employment for a single month, excluding the farming sector, for the United States.

 

The figure is released as part of the U.S employment report on the first Friday of the month and contains information on unemployment, job growth and payroll data, amongst other quantitative statistics.  The NFP figure is one of the most closely watched indicators relating to the employment sector and is considered an accurate reflection of job creation.

 

The Feds responsibility to keep employment within a healthy range means this figure could have a causal effect on interest rates, and by association the USD and wider economy. Generally speaking the higher the number the better it is for the economy, however a figure below consensus can still have a negative impact if it catches traders off guard.

 

How does NFP affect the markets?

Generally speaking a higher number shows economic strength and is followed by a bullish movement in the USD. Most traders look out for an addition of 100,000 jobs or more as a positive sign, whilst any less is a negative as it indicates a lack of growth.

 

Anything outside of consensus can catch traders off guard pushing them to look to additional data from the employment report such as unemployment or manufacturing payroll numbers. For example a smaller unemployment figure and high payroll would generally cause dollar strength.

 

Link to comment

Hi all

 

When trading over figures some traders look to use indicators to trade the breaks of ranges. This can be as simple as previous highs, be it daily or weekly, but there are some alternative ways.

 

The Donchian channel is rather simple and yet effective way of overlaying on your charts the high and low of the last x amount of periods (In our example below we have used the 20 day as a standard period length). The great thing about this indicator is that it can show you levels of support and resistance, and when you're a few days out of a macro event you can start to formualte a trade idea and plan of what you can see as a potential range. 

 

This way traders are able to easily visualise key levels and it can be used in a number of instances including trading data or extremes in price. Markets with very wide Donchian channels can be considered more volatile compared to those with narrow channels. Below is how it looks.

 

2017-10-02 17_29_51-GBP_USD.png

There are many indicators out there and so if any of you want to share what you use for trading data or what set ups you use then we would love the hear. It may also be worth having a look at Investopedia for a second account of the calculation. 

 

I have also set up my chart to show News articles 'in chart'. This way you can keep an eye on the fundamentals, whilst also looking at some technical indicators. 

Link to comment
Guest ChrisB

All trading involves risk. Losses can exceed deposits.

 

EURUSD is one to watch ahead of NFPs, given the current weakness. NFPs are likely to be weak thanks to the hurricane impact, which didn’t show up in the August figures, so any improvement above expectations, or  better-than-expected rise in earnings, could push EURUSD lower.

 

The $1.1662 level is key, being the low from mid-August. A break of that and it could well prompt a swift move lower. With Catalonia hanging over eurozone assets euro bulls will find it hard to move higher, but a push above the end-Sept high at $1.1830 would be a start.

 

EURUSD.jpg

Link to comment
Guest ChrisB

All trading involves risk. Losses can exceed deposits.

Dow

Having leapt higher into Q4, the Dow is firmly back in an uptrend – even given its extended move, it is still not ripe for much selling. However, a disappointing NFP might provide the hit to risk appetite that could prompt a drop back towards 22,400 or even lower, but this would still constitute, I suspect another opportunity to ‘buy the dip’ thanks to strong seasonal trends.

 

dow.jpg

Link to comment

Hi 

I need to speak to someone about the IG Economic Calendar - I can't see where that is pulling through from.

 

The median estimate is 80k, with an average of 81.02k.

I can see a high analysts estimate of 153k and a low of -45k.

 

I will try and get a Bloomberg screenshot and see if I can post it. 

Link to comment

Good snapshot visual of effect of Employment Report from Bloomberg. U.S. dollar has risen to its highest level in 10 weeks on the back of the largest gain in wages since December 2016. This would point to a higher likelihood of a rate rise by the end of year. (Goldman Raises December Rate Hike Odds To 80%)

 

DLdkkkUVoAArqtf.jpg

U.S. two-year yields hit their highest since October 2008 at 1.52 percent. Although it's easy to get lost in the headline -33k jobs from the non-farm report, it seems the market expects this is on the back of hurricane season and therefore a short term outcome. Temporary displacement and unemployment would be an obvious knock on effect, as well as a delay to hiring. 

Link to comment

Archived

This topic is now archived and is closed to further replies.

  • General Statistics

    • Total Topics
      23,624
    • Total Posts
      97,008
    • Total Members
      44,187
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    DVB
    Joined 05/12/23 10:04
  • Posts

    • Interesting, seems like a good avenue to increase my equity so how can i participate in the campaign?
    • Dive into DAX's record-breaking run, fuelled by Eurozone inflation easing. Explore market dynamics, technical analysis, and potential risks.   Source: Bloomberg   Indices Inflation DAX Eurozone Technical analysis Interest  Tony Sycamore | Market Analyst, Australia | Publication date: Tuesday 05 December 2023 05:46 Last week marked a historic fifth consecutive gain for the DAX, echoing patterns not seen since October 2022. The DAX’s gains last week were supported by a Eurozone inflation report, which showed inflation eased to 2.4% in November, its lowest level since July 2021. Core inflation fell to 3.6% in November from 4.2% in October. With disinflation in Europe playing out much like in the US, it's no surprise that the European interest rate curve is pricing in five 25bp ECB rate cuts by the end of 2024. The UK rates market isn’t quite as excited about BoE rate cuts. Although headline inflation has fallen from 10.7% to 4.6% last month, core inflation at 5.7% is still too high. This explains why the UK rates market is pricing in just two and a half BoE rate cuts in 2024. The contrasting inflation and interest rate outlook between the Eurozone and the UK helps to explain why the DAX gained 9.41% in November while the FTSE gained only 1.8% during the same time. FTSE daily chart   DAX technical analysis Like its US counterpart, the S&P 500, the DAX has gotten very close, but thus far, failed to break above its year-to-date highs. As viewed on the RSI, the DAX is at extremely overbought levels, and while we remain bullish into year-end, we would not contemplate opening fresh longs at these levels. Instead, we would prefer to use dips back towards support at 16,100/16,000, looking for the DAX to retest and break above the 16,615 July high in the weeks ahead. Aware that a sustained break below the support of the 200-day moving average at 15782 would warn that the rally has run its course and that a deeper pullback is underway. DAX daily chart   Source: TradingView Source Tradingview. The figures stated are as of 5 December 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.     This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
    • Stocks continue to trim the gains made in November. Following a lower session on Wall Street, Asian indices came under pressure. The Nikkei hit a three-week low, while the Hang Seng index touched a fresh one-year low as funds continued to flow out of Chinese indices. The RBA left rates unchanged, and the dovish tone of the statement caught some by surprise. It said that future rate changes would depend on data. In China the Caixin services PMI hit a three-month high of 51.5, but this did little to boost sentiment towards Chinese stocks. European and US markets are expected to open lower, ahead of the US ISM services PMI, and as the focus turns to the monthly US job reports this week.  
×
×
  • Create New...
us