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Higher Tensions towards the Non-Farm Payrolls

The tension in the markets is rising towards the release of May’s Non-Farm Payrolls. The already high expectations were raised on new data that has emerged. Updated towards the big event.

EUR/USD returned back to the range after making a dip earlier this week. Another move after today’s figures was also contained. The markets are anxious towards the NFP, which mostly affects the Euro. Expectations rose from 500K to 524K. Let’s see why:

This post is an addition to my Non-Farm Payrolls preview published earlier this week.

New Figures

On Thursday, two major job-related figures were released. First, the ADP Non-Farm Payrolls showed a gain of 55,000 jobs, slightly below 68,000 that was expected. On the other hand, last month’s gain doubled to 65,000 on an upwards revision. All in all, ADP’s number for the private sector is aligning with the government’s number.

The private sector part of the Non-Farm Payrolls is expected to show a gain of 180,000. Also in previous months, the gain showed by ADP was smaller, but the trend is positive.

The second release was the weekly unemployment claims. Jobless claims dropped from 463K to 451K, within expectations. This number shows stability in joblessness, which confirms the expectations for a small drop in the unemployment rate – from 9.9% to 9.8%.

The rise in NFP expectations comes also from the ISM figures. The Non-Manufacturing sector, or services sector if you wish, remained unchanged, still a nice positive number – 55.4. A score above 50 means economic expansion. Also the manufacturing sector remained almost unchanged. In a report earlier in the week, it scored 59.7 points.

The American numbers didn’t provide huge surprises, but they confirmed a steady recovery on all fronts. Together with the government’s huge hiring towards the decennial census, the headline number of 524K – highest in 13 years, can be met.

General Notes

The release of the NFP is the most volatile event in forex trading, and has special characteristics. Here are my 5 notes for Non-Farm Payrolls trading.

I highly recommend following the Non-Farm Payrolls release with an excellent webinar from Alex Kazmarck. The webinar will benefit traders of all levels. Kazmarck brings 10 years of market analysis experience, and will talk about pricing action as it is occurring before, during and after the release of the Non-Farm Payrolls data.

Registration to the webinar is free, but is limited to 100 registrants. Click here to join.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.