NFP – September 1, 2017

Tomorrow promises to be a very exciting day for most forex traders and investors. At exactly, 12:30 pm GMT, the US non-farm payrolls (NFP) will be released and this implies that the greenback will most likely have a little volatility infused into it. Here is a preview of the event before it happens.

Results from last NFP release:

• The July NFP turned out to be around 209k compared to the expected 180k
• June NFP was reviewed and upgraded to 231k from 222k
• After revision, the May NFP was downgraded from 152k to 145k
• The average hourly earnings exceeded the 0.2% previous mark to stand at 0.3%.
• Jobless rate decreased to 4.3%.
• The participation of the labor force stood at 62.9%

Expected result tomorrow.

• NFP will likely drop to 180k.
• The jobless rate will remain unchanged and stay at 4.3%
• The average hourly rate will drop from the previous 0.3% to 0.2%

For tomorrows release, the general consensus amongst analyst is that only 180K non-farm jobs were generated during the August period. This is a decrease from the figures gotten in July and the general agreement is that job growth has been rather slow in August.

The jobless rate, on the other hand, is expected to remain at the same figure (4.3%). The average hourly rate is expected to change from the previous 0.3% to 0.2%. This is a weaker figure than the one reported back in July.

Markit Reports

The Markit’s manufacturing and services PMI reports have been released and the PMI fell from 53.3 to 52.5. Markit however commented that the companies didn’t stop adding to their payrolls this month and this will ultimately leave the rate of job creation unchanged from the record achieved last month. Markit’s US services PMI rose from its meagerly 54.7 to a 56.9 this August. This figure is the highest recorded for the past 28 months. This, however, was marred by the comments made by Markit that indicated that the rate of payroll growth was below that recorded in July, though it was only by a fraction.

The ADP results have also been released and an increase by 237k was recorded in August. This figure was well ahead of the 185 increased that is expected of the NFP. The figure is also ahead of the 201k increased that was recorded in July.

The reports coming in so far have been contradicting each other. ADP report had indicated that there is a strong job growth in August while Markit reports had indicated that the job growth in August is actually slow.

Slow Trading Ahead of Long Weekend

Tomorrow is a paradox; there will be a burst of volatility due to NFP, but at the same time; many of the USD market movers are on vacation, taking a long weekend ahead of the Labor Day celebration in the USA on Monday September 4th. This means there will be some volatility but without the needed liquidity, the markets should likely fall flat.

It is unlikely that any new Forex signals will be sent ahead of the weekend, but nonetheless we will keep our eyes peeled on the market for possibilities. Very likely we will see lots of trading action early next week once the markets re-open after Labor Day.

Just for fun – check out a collection of our best trades from August 2017.