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On August 26th, ING strategists Padhraic Garvey and Michiel Tukker stated that market discussions surrounding the U.S. Treasurys decision to double the size of its long-term Treasury repurchase program continue to intensify, but with the Jackson Hole Economic Symposium approaching, market focus will gradually shift to short-term bonds. In a report, the two strategists noted, "Treasury Secretary Bessenter continues to dominate, or rather attempts to dominate, the long-term bond market, while Federal Reserve Chairman Warsh may also want to play a similar role in the short-term bond market, although he is currently choosing to remain low-key." The strategists indicated that Warsh will have the opportunity to further elaborate on his views at the Jackson Hole symposium on Friday.On August 26, 2026, Wang Yi, member of the Political Bureau of the CPC Central Committee and Foreign Minister, met with Uzbekistans Chief of Staff, Mirziyoyeva, in Beijing. Wang Yi stated that China has always been a trustworthy and reliable partner of Uzbekistan, and will, as always, support Uzbekistan in safeguarding its national sovereignty, security, and development interests, in pursuing a development path suited to its national conditions, and in President Mirziyoyevas policies and initiatives to build a "New Uzbekistan." He expressed confidence that Uzbekistan will continue to provide firm support on issues concerning Chinas core interests. China is willing to work with Uzbekistan, guided by the important consensus reached by the two heads of state, to strengthen high-level exchanges, accelerate the construction of landmark projects such as the China-Kyrgyzstan-Uzbekistan railway, promote mutually beneficial cooperation in trade and investment, energy and minerals, culture and people-to-people exchanges, and local cooperation, expand cooperation in emerging fields such as artificial intelligence and renewable energy, and strengthen multilateral coordination to write a new chapter in China-Uzbekistan friendly cooperation.The UK energy regulator OFGEM says the abolition of VAT will benefit customers currently on flat-rate packages, as suppliers will automatically apply discounts.The UKs energy regulator OFGEM announced that from October, the price cap will increase by £60 per year (or £5 per month) to £1,723 for households using both electricity and gas.The UKs energy regulator OFGEM has stated in this update that the governments decision to abolish VAT on all household electricity bills has been reflected in the decision.

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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