Thursday, January 3, 2019

Non Farm Payrolls


The U.S Non-Farm Payrolls will be released Friday, 4th of January 2019 13:30 GMT and is a key economic indicator that can cause volatility in the markets.


What to Expect this Month:

Non-Farm Payrolls are expected to have increased by 177,000 last month, which will be an improvement on November's 155,000 but below the six month average of 213,000.  The unemployment rate is expected to be unchanged and average hourly earnings should increase 0.3% on the month and 3.0% on the year compared to 0.2% and 3.1% in November.

Growth in the US economy grew by 3.3% annualized average during the first three quarters of 2018, however the fourth quarter is now expected to be in the region of a disappointing 2.7%, which would leave the year at 3.125%, and still the strongest growth over the last ten year period.

Even though the overall figures are impressive, there are persistent worries about slowing global economic growth and the events surrounding the slow-down globally being the trade dispute between the United States and China, Brexit uncertainty,  Italy's Pyrrhic budget victory and France's fuel tax debacle. These concerns have been reflected in the end of year losses for the equities with heavy international exposure.

The Dow Jones was trading at 13% lower than its October highs at Wednesday’s close and the S&P 500 had lost 15%, and questions remain whether the US sustain its expansion particularly if growth in the other two largest economic blocs, China and the EU are struggling, and after November's poor Non-Farm Payrolls, is the US economy slipping backwards after such a strong and impressive year of growth? Moreover, if there will be another weak NFP report, will the Fed reconsider its expected rate-hikes?

Opportunities around the NFP Reports:

Regardless of the results of the Non Farm Payrolls, the markets always experience moves immediately after the release which offer traders excellent short-term trading opportunities. Positive or negative reports will affect market sentiment which can create new trends and trading opportunities.

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