Non Farm economic derivatives auction

Traders see April payrolls up 88,800 in auction

Thu May 3, 2007 8:19AM EDTNEW YORK, May 3
Source Reuters

(Reuters) - Traders were betting on Thursday that U.S. employers added 88,800 jobs in April, according to the preliminary implied median market forecast of a derivatives auction.

The result was below the 96,100 jobs implied in an auction on Wednesday and compared with the median forecast of economists in a Reuters poll for a 100,000 rise in April.

The U.S. Labor Department will issue the April non-farm payroll report on Friday at 8:30 a.m. (1230 GMT).

Investors use the auctions to hedge against surprises in the report, and traders also use the auctions to speculate on the outcome.

Newbie question...
Does that mean the dollar will go down or up?

It means that traders are speculating 88,800 jobs which is less than expected. Rising trend means a rising dollar.

If they come in below expectations that would have a negative effect on the dollar.

I think I will pay more attention to the derivative auction in the future. Traders speculation of 88K was spot on.

good post and very true.

whats funny is:

"The result was below the 96,100 jobs implied in an auction on Wednesday and compared with the median forecast of economists in a Reuters poll for a 100,000 rise in April."

the economist have no money on the line when responding to a poll Vs the derivative traders in the auction have a dog in the fight and respond w/ their money.

MCP