The non-farm payroll is coming up on Friday. As a key economic indicator, it often leads to significant market movements.
The NFP is always a highly anticipated release. It shows the change in the number of employed people in the US from month to month, not including the farming sector. It’s commonly regarded as an indicator of the health of the US economy, and that means it has an impact on the USD and wider markets.
If the NFP reading is high, stocks and the dollar often make gains. While a lower than expected reading can lead to a bearish trend.
What to expect from this month’s NFP?
- 2023’s first NFP might bring some activity to markets but very high volatility is unlikely.
- The NFP might be higher than the consensus as it has been consistently in recent months, which could be positive for the dollar and shares.
- M15’s ATR for gold peaked at around $5.75 after December’s NFP. A repeat of this is unfavourable given seasonality.
- Around 70% of participants are pricing in a single hike by the Fed next month, so with little intrigue movements could be relatively muted.
- The focus this Friday is on average hourly earnings. If this diverges significantly from the overall report again, another ‘false kneejerk’ like in December is possible.
Are you ready to trade the NFP?
The response to the NFP can sometimes cause market volatility. We suggest you fund your account in advance of the release so you’re ready to trade any opportunities that arise.
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