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According to Israels Channel 12: Security agencies are preparing for a possible decision by Trump to take military action against Iran in the coming days.According to Israels Channel 12: Israel is closely monitoring the draft agreement between the United States and Iran, fearing that Tehran may receive sanctions relief without resolving the nuclear issue.According to Israels Channel 12: The Israeli military has declared a state of high alert in order to prevent a possible escalation of tensions with Iran.May 23 - Reuters, citing an internal document, reported that 27 countries have activated their domestic crisis response mechanisms to apply for World Bank funding to address the global economic impact of the conflict in Iran. The World Bank document did not list specific countries or the total amount of funding potentially requested, but officials in Kenya and Iraq confirmed they are seeking rapid financial support from the World Bank to address the effects of the conflict, such as soaring fuel prices and a sharp drop in oil revenues.On May 23, it was reported that India, the worlds third-largest consumer of liquefied petroleum gas (LPG), is currently facing an LPG supply gap of approximately 400,000 barrels per day (compared to pre-war levels), with domestic production unable to compensate for the decline in imports caused by the war with Iran. Data from energy data analytics firm Kpler shows that Indias LPG imports in April were 377,620 barrels per day, less than half of the 851,870 barrels per day imported in February. In April, Indias domestic production increased to 530,000 barrels per day, an increase of approximately 75,000 barrels per day from the previous month. Sumit Ritolia, chief refining and supply analyst at Kpler, stated that the situation is more serious because Indias domestic LPG production is nearing full capacity, meaning that the supply gap could persist as long as imports do not fully recover. A black market seller stated, "Due to soaring costs, we noticed a slight slowdown in customer demand in April. But people have no choice, as switching to other fuels is not easy."

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.

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