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
      22,107
    • Total Posts
      92,972
    • Total Members
      42,495
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    nonemo
    Joined 03/06/23 15:54
  • Posts

    • I don't know but it looks like a really awesome service Because I have come across all sorts of mixers in my work  
    • Charting the Markets: 2 June Indices rally as US agrees debt ceiling bill. EUR/USD, GBP/USD rally while EUR/GBP stabilises as US debt ceiling bill is passed. And WTI recoups recent losses while gold, silver on track for first weekly advance. Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Friday 02 June 2023               This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.
    • It was a blockbuster number yesterday for the ADP private payrolls, showing 278,000 jobs opened in May, while forecasts had been for 170,000.  Jeremy Naylor | Analyst, London | Publication date: Friday 02 June 2023 IGTV’s Jeremy Naylor suggests a similar upside surprise could see almost 300,000 jobs created under the non-farm payroll count with estimates for 190,000 job creations. The unemployment rate is seen rising one notch to 3.5%. (Video Transcript) NPFs: what to expect Could yesterday's strong private payrolls number from the ADP reading give us an insight into the potential upside risk to today's non-farm payrolls? That report from ADP yesterday showed 278,000 jobs opened in May - forecasts had been for 170,000. Now the NFP expectations, 190,000 job creations are forecast for the month of May proportionately using that ADP surprise. That would mean an upside reading for NFPs close to 300,000. Why the increase? Now, the unemployment rate is seen rising one notch to 3.5%. Why is that rising? When you've got that rise in the number of job creations, the unemployment rate is not taking the same data that the jobs numbers themselves are being produced from average hourly earnings. We're looking there for that to go up 0.3% month-on-month, 4.4% year-on-year, still below the rate of inflation. Now, this chart shows the unemployment rate back to pre-Covid-19 levels. It's clear that jobs have been created at an appreciable rate and this alongside a relatively strong GDP number and inflation coming down, there may yet be a soft landing for the US economy. But if the Federal Reserve (Fed) does continue to raise rates, things may get a little bit more sticky for the economy and a little bit more difficult to predict. This is a comparison of fed funds rates and US consumer price inflation (CPI) since January 2021. So you can see here the rate at which the US central bank has been piling the pressure on the monetary markets with that rise to five and a quarter percent. And at the same time, the CPI number is coming down, which is a good thing, but it's still not down to the 2% level, 4.9% is a long way away still from the 2% target. So the Fed is entitled still to have an excuse to raise interest rates. US dollar basket Let's take a look at what's been happening with the US dollar basket. Yesterday, we saw a pullback coming through as we saw money going into risk assets because of that rubber stamping from the Senate or the vote in the Senate to approve the budget that's now gone for the presidential seal. EUR/USD And we've seen a second day in a row of losses or the euro for the dollar basket as far as the euro/dollar is concerned, bouncing away from that 76.4% retracement. And I think now, you will have been stopped out if you were short on this, you would have been stopped out on this and hopefully you would have got some profits on the way down. So that's where things are ahead of non-farm payrolls out today at 13:30 UK time. And we will be live on the IG platform at 13:25 today.
×
×
  • Create New...