EUR/USD 1.16952
-0.157%
Gold 4687.83
-0.019%
Oil 97.065
0.095%
USD/JPY 157.915
0.024%
GBP/USD 1.35084
-0.108%
GBP/JPY 213.323
-0.082%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
Mexican President Sinbaum: The trade agreement with the EU will not affect the USMCA.On May 14th, data released by the U.S. government on Thursday showed that U.S. business inventories recorded their largest increase in nearly four years in March, driven by a rise in wholesale inventories. The data showed that business inventories rose 0.9% month-over-month in March, the largest increase since June 2022, exceeding market expectations of 0.8% and following a 0.4% increase in February. Year-over-year, business inventories rose 2.0% in March. The U.S. government estimated last month that business inventories contributed 0.40 percentage points to the annualized GDP growth rate in the first quarter. The U.S. economy grew at an annualized rate of 2.0% in the first quarter, compared to 0.5% in the October-December quarter of last year. Component data showed that retail inventories rose 0.6% in March, after remaining flat in February; wholesale inventories surged 1.3%; and manufacturer inventories rose 0.6%.According to the Wall Street Journal, the Indian Ministry of External Affairs stated that the ongoing attacks on merchant ships are "unacceptable."On May 14th, Federal Reserve Chairman Schmid stated that inflation remains the biggest risk to the U.S. economy, although the economy has shown "remarkable resilience" in the face of numerous challenges, and the labor market remains generally stable. In prepared remarks at a banking conference hosted by the Kansas City Fed, Schmid said, "I believe that persistent inflation is the most pressing risk to the economy right now. While inflation has fallen significantly from its peak, it is clear from my conversations with business leaders in the 10th District that inflation remains excessively high." Schmid added, "Despite the many challenges facing the U.S. economy, it has also shown remarkable resilience. Geopolitical uncertainty continues. While the U.S. is less vulnerable to global energy disruptions than in the past, higher oil prices will still weaken household spending and push up business costs. However, even with these headwinds, the fundamentals of the U.S. and the 10th District economies remain robust."On May 14th, Canada unveiled a C$1 trillion strategy to double the countrys grid capacity by 2050, citing rapidly growing electricity demand and rising energy security needs. As part of this strategy, the Canadian government plans to amend clean electricity regulations to allow for greater use of credible carbon offsets and provide existing natural gas generators with greater operational flexibility to maintain grid stability and power supply reliability.

What impact does NFP have on the forex market?

LEO

Oct 25, 2021 13:27

Nonfarm payroll employment is a compiled name for goods, construction and manufacturing companies in the US. It does not include farm workers, private household employees, or non-profit organization employees.

It is an influential statistic and economic indicator released monthly by the United States Department of Labor as part of a comprehensive report on the state of the labor market.

The Bureau of Labor Statistics releases data on the first Friday of the month, at 8:30 a.m. Eastern Time. 

This data is analyzed closely because of its importance in identifying the rate of economic growth and inflation.

Nonfarm payroll is included in the monthly Employment Situation or informally the jobs report and affects the US dollar, the Foreign exchange market, the bond market, and the stock market.

The markets react very quickly and most of the time in a very volatile fashion around the time the NFP data is released. The short-term market moves indicate that there is a very strong correlation between the NFP data and the strength of the US dollar. Historical price movement data shows a small negative correlation between the NFP data and the US dollar Index.

The figure released is the change in nonfarm payrolls (NFP), compared to the previous month, and is usually between +10,000 and +250,000 during non-recessional times. The NFP number is meant to represent the number of jobs added or lost in the economy over the last month, not including jobs relating to the farming industry.

As with other indicators, the difference between the actual non-farm data and expected figures will determine the overall impact on the market. If the non-farm payroll is expanding, this is a good indication that the economy is growing, and vice versa. However, if increases in non-farm payroll occur at a fast rate, this may lead to an increase in inflation. In forex, the level of actual non-farm payroll compared to payroll estimates is taken very seriously. If the actual data comes in lower than economists' estimates, forex traders will usually sell U.S. dollars in anticipation of a weakening currency. The opposite is true when the data is higher than economists' expectations.

Suggestion