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Futures News on October 11, one working day before and after the National Day, plastic products rose overall, PP, PE rose by about 200 yuan/ton, downstream BOPP, CPP rose by 200-400 yuan/ton, and downstream tape mother rolls rose by 300-500 yuan/ton; however, the rise retreated instantly on the 9th, and some markets have already seen a downward trend. Zhuochuang analysts believe that there are the following influencing factors. First, the main reason for the price increase is driven by macro market news. The news of "interest rate cuts" and "reservation cuts" before the holiday boosted the confidence of market traders; second, the five consecutive increases in international oil prices during the National Day gave the market a strong boost, and the market had a good start after the holiday; third, after the sharp rise in prices, the market orders were limited, and the buying support was insufficient, coupled with the futures turning downward and crude oil falling from highs. This week, the macro positives have dissipated, and the market has returned to fundamentals. It is expected that the plastic market will be consolidated after the rise, and some products will fall back from highs.Futures reported on October 11 that the average price of asphalt in the country was 3,717.52 yuan/ton in the week after the holiday, up 3.90 yuan/ton or 0.1% from before the holiday. The price of asphalt rebounded, and the spot prices of asphalt in major domestic regions fluctuated significantly. Forecast: Next week, the fundamentals are limited, and the uncertainty of crude oil is relatively large. It is expected that the spot price will fluctuate slightly with crude oil, and the fluctuation range will be 3,680-3,720 yuan/ton. 1. From the demand perspective, next week, the Northeast, Northwest and northern North China will focus on rushing to work before the temperature drops. The rigid demand for asphalt in the north will still perform well, and the demand in other regions may be relatively stable. 2. From the supply perspective, the adjustment of the tax deduction policy for diluted asphalt has not been implemented, and the negative impact on the production link of local asphalt refining is limited. It is expected that the operating rate will gradually increase, and the asphalt output will increase gradually, which is bearish for the spot market. 3. From a policy perspective, the State Council Information Office will hold a press conference on the morning of October 12 to introduce the situation of "strengthening the countercyclical adjustment of fiscal policy and promoting high-quality economic development". The incremental fiscal policy this year may boost the commodity market including asphalt. 4. In terms of cost, there is still uncertainty in the conflict in the Middle East. Oil prices are expected to fluctuate widely next week. The average price of US crude oil is US$72 per barrel, and the fluctuation range is between US$70-75 per barrel. The uncertainty is relatively large, which has a strong impact on the spot price of asphalt.Futures News on October 11: As of October 10, the mainstream price of 6517 silicon manganese was 6200-63500 yuan/ton, down 5.21% month-on-month. After the holiday, silicon manganese futures showed both high and low trends, and the spot price was willing to rise. The current market fundamentals game is still going on, and the industry is cautious in operation. The implementation of the price increase of raw coke and the high trend of futures have brought certain confidence to the silicon manganese market. In the near future, the release of downstream demand may be expected to be improved to a certain extent, stimulating the enthusiasm of steel mills to produce, and the willingness to inquire about alloy purchases may increase. In the short term, the silicon manganese market is in a wait-and-see mood, and it is still necessary to follow up and pay attention to the performance of the market and the latest progress of steel recruitment to give the market clearer signals.Futures News on October 11, Ansteel adjusted its product price policy for November 2024 based on the "Product Price Policy for October 2024" as follows: Hot-rolled steel increased by 500 yuan/ton. Cold-rolled steel increased by 500 yuan/ton, medium and thick plates increased by 500 yuan/ton. Wire rod increased by 500 yuan/ton. Rebar increased by 500 yuan/ton.Futures news on October 11, according to Wind data, as of the week of October 11, the profit of self-breeding and self-raising pig farming was 305.91 yuan/head, and the profit on September 27 was 368.14 yuan/head; the profit of purchasing piglets for breeding was 47.27 yuan/head, and the profit on September 27 was 185.28 yuan/head.

NFP and Forex: What is NFP and How Does It Work?

Larissa Barlow

Mar 25, 2022 14:57

Nfp And Forex Trading: Key Points of Discussion 

  • The announcement of Non-Farm Payrolls (NFP) creates volatility in the FX market.

  • The NFP calculates the net change in employment jobs.

  • Forex traders utilize an economic calendar to anticipate the publication of the NFP.

  • What is a non-governmental organization (nfp)?

 

Non-farm payrolls (NFP) are a critical economic indicator for the US economy. It is the amount of new employment created, excluding agricultural workers, government employees, private home employees, and nonprofit organization employees.

 

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In general, NFP announcements produce significant volatility in the FX market. Typically, the NFP data is provided on the first Friday of each month at 8:30 a.m. ET. This article will discuss the importance of non-farm payrolls in economics and how to use them into a forex trading strategy.

 

What Effect Does The NFP Have On Forex?

 

NFP data is significant since it is issued monthly, giving it an excellent predictor of the economy's present status. The Bureau of Labor Statistics releases the statistics, and the next release may be found on an economic calendar.

 

The Federal Reserve Bank views employment as a critical indicator. When unemployment is elevated, policymakers frequently pursue an expansionary monetary policy (stimulatory, with low interest rates). An expansionary monetary policy seeks to boost economic production and employment.

 

Thus, if the unemployment rate is greater than usual, policymakers will attempt to stimulate the economy. Stimulatory monetary policy means lowering interest rates and decreasing demand for the Dollar (money flows out of a low yielding currency). To understand how this works in detail, please read our article on how interest rates affect FX.

 

The chart below illustrates how volatile FX can be following the announcement of the NFP. The projected NFP result for March 8, 2019 was 180k (job additions), however the actual result was only 20k. As a result, the value of the Dollar Index (DXY) decreased and volatility rose.

 

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Forex traders must exercise caution when it comes to data releases such as the NFP. Traders may be stopped out as a result of the abrupt surge in volatility. Spreads rise in lockstep with volatility, and larger spreads might result in margin calls.

Which Currency Pairs Are Affected the Most by the NFP

Because the NFP data is a leading predictor of American employment, it has the greatest impact on currency pairs that contain the US Dollar (EUR/USD, USD/JPY, GBP/USD, AUD/USD, and USD/CHF, among others).

 

Other currency pairings also see an uptick in volatility following the release of the NFP, and traders must be mindful of this risk of being stopped out. The chart below illustrates the CAD/JPY exchange rate during the publication of the NFP data. As you can see, even if a trader is not trading a currency pair tied to the US Dollar, a rise in volatility might force a trader out of their position.

 

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Dates for the Release of Non-Farm Payroll

NFP figures are typically released by the Bureau of Labor Statistics on the first Friday of each month at 8:30 a.m. ET. On the Bureau of Labor Statistics' website, you may see the release dates.

 

We propose adopting a pull-back strategy rather than a breakthrough approach because to the volatility nature of the NFP announcement. Before entering a trade using a pullback technique, traders should wait for the currency pair to retrace.

 

Using the same scenario as earlier (NFP findings of 20,000 vs. 180,000 predicted), we anticipate a depreciation of the US Dollar. In the example below, we will use the EUR/USD currency pair. We predict the EUR/USD will rise as a result of the worse-than-expected NFP report.

 

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Trading Nfp Data Releases: Best Practices & Additional Reading

The following are some pointers to keep in mind while utilizing NFP data releases to guide your forex trading:

 

  1. Each month, the NFP data is provided on the first Friday.

  2. Increased volatility and widening spreads are accompanying the announcement of the NFP data.

  3. Currency pairings that are not tied to the US Dollar may also see greater volatility and spread widening.

  4. Trading the NFP data release can be risky owing to increased volatility and potential spread widening. To avoid being stopped out, we recommend applying the right leverage, or none at all.

 

Other significant data releases to keep an eye on include the following:

 

While the NFP often influences the market, other major data releases include the CPI (inflation), Fed funds rates, and GDP growth.

 

If you're interested in learning more about trading the news and data releases, check out our beginner's guide to trading the news. Additionally, we recommend reading our tutorial on the characteristics of great traders to avoid the number one error traders make while trading forex.

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