NFP report

Merlin, thanks for hosting the party!

What I mean by revisions is that, for example, tomorrow when the December jobs report is released, that there will probably be revisions to the November number, and maybe to the October number. And there is, lately, as much reaction to these revisions, as to the December number itself! Which is FR-EA-KY!

yeah i understood, maybe my reply was poorly worded (as usual!). i was agreeing, it feels like the revisions have been larger lately, more so than 6 months ago. here we are talking about trading the revised number, it didn't use to be like that!

negative ADP and increasingly conflicted Fed make the dollar rally of the last couple days that much more compelling.... could be quite a whipsaw in the making esp. if unemployment rate remains below the historic 4.7% average.

it is very nice to see you Rob. I have watched a couple of your videos from FXCM seminars. You are a VERY welcome addition here. I appreciate your insight and your resources.

I am just a nobody but I have been turning the corner from a breakeven trader to a profitable one. I trade NEWS and position trade with Day charts.

I am glad to have your knowledge here to compare my own thinking.

Thanks for you work.

DC

Well merlin, like you pointed out, I'm really hoping for some $- negative news what with all of the recent buying here in the last few days. We get that, and we could see what one of those 100 pip moves from NFP that hasn't occurred in awhile now...

RobBooker

question for ya

If NFP comes out below 100k and revisions come out lower then they were will that be enough to propel the GBP and Euro in the opposite direction and actually reversing the trend?

Also i was analizing this last month and realized that unemployment has been getting worse every week starting with the first week in december. Another question would be do u have the unemployment data for the last few years and does the 4 weeks of unemployment data usually coincide with the NFP report each month?

Yes, I think that a number below 100k revisions lower would be enough to reverse the recent dollar strength.

On the other hand, both of those happening is unlikely. More likely is a number below 100k but not downward revisions.

I do have all the unemployment data for 4 years back. I can wrap that up and post it around here sometime next week. It will take me some time to get the data in a format that is usable.

I have NOT found that the weekly unemployment claims can help with a forecast for NFP. They have been really unrelated in my experience.

estimate


=78k
=4.6%

got in early this morning at 1.3062 on a long eur/usd...

yes against the trend, but the downside risk is small

Heres a question... Does the Non Farm have a direct affect on lets say the Dow?

Obviously those markets an 1 Hour later I think... so would it not be feasible to say that if we get a positive Non-Farm the Dow would also Rally throughout the trading day?

Maybe a nice way to capitalise on the Non-Farm without having to trade the spike....

Anyone know where I can get hostorical data for those matrkets so I can compare to past non farm results...

nice job i had a stop order set to execute at 3055 long but it didnt get there

ok the big question is for the revisions. Where do i find them? Are they spoken right after the actual for this month is said or are they only written somewhere and please direct me to the exact spot if possible

EUR/USD : The move is going to be up.

Micardo, I think the strongest NFP effect is found in fx and fixed income, equity effects more ambiguous, and commodity impacts even more so. Historically, a surprise of 100k in the NFP has often translated to a roughly 1% change in cable by the end of the day, and also close to 1% for fixed income, namely the 10yr UST. Of course, this effect may be less obvious now due to recent exaggerated revision impacts.

One interesting area for analyis for intraday NFP traders would be to assess the value of 10yr UST yield changes as a lead indicator for moves in the USD after the release of the non farms.

Ghostpipper, if you back to page 1 of this thread, I posted data for the NFP, including revisions, back to 1999, or even a bit earlier.

Bloomberg Survey

FIRM Nonfarm Unemploy Manu Avg Hrly
Payroll Rate Payroll Earnings
------------------------------------------------------------
Number of replies 69 67 15 47
MEDIAN 100 4.5% -15 0.3%
AVERAGE 96 4.5% -17 0.3%
High Forecast 164 4.7% -5 0.4%
Low Forecast 0 4.4% -45 0.1%
Previous 132 4.5% -15 0.2%
------------------------------------------------------------
ABN Amro 125 4.5% n/a n/a
4CAST Ltd. 120 4.5% n/a 0.3%
Action Economics 80 4.6% -20 0.3%
AIG Global Invest. 164 4.5% n/a 0.3%
Alleti Gestielle SGR 95 4.5% -20 n/a
Argus Research Corp. 45 4.4% -15 0.3%
BBVA 120 4.6% n/a 0.3%
BMO Capital Markets 125 4.5% n/a 0.3%
BNP Paribas 55 4.5% n/a 0.3%
B of A Securities 90 4.5% n/a 0.3%
Bancolombia SA 140 n/a n/a n/a
Banco Itau Europa 90 4.5% n/a n/a
Bantleon Bank AG 70 4.6% n/a n/a
Barclays Capital 125 4.5% n/a 0.3%
Bear Stearns 120 4.4% n/a 0.3%
Bank of Tokyo-Mitsubishi 22 4.5% -10 0.3%
Briefing.com 115 4.5% n/a 0.4%
Calyon 30 4.5% n/a n/a
CIBC World Markets 75 4.6% n/a 0.2%
Citigroup 135 4.5% n/a 0.4%
ClearView Economics 125 4.5% -15 0.3%
Commerzbank 90 4.6% -5 0.2%
Countrywide SEC 40 4.5% -20 0.3%
Credit Suisse 100 4.5% n/a 0.4%
Daiwa Securities 110 4.5% n/a n/a
Danske Bank 70 4.5% n/a n/a
DekaBank 120 4.6% n/a 0.3%
Desjardins Group 110 4.5% n/a 0.3%
Deutsche Bank Research 75 4.7% n/a 0.2%
Deutsche PostBank 120 4.5% n/a n/a
DZ Bank 125 4.5% n/a 0.3%
Essen Hyp. 50 n/a n/a n/a
FIMAT-Cube 85 4.5% n/a 0.3%
FTN Financial 90 4.5% n/a 0.1%
Fortis 150 4.4% n/a n/a
Global Insight 100 4.6% n/a 0.3%
Goldman Sachs 75 4.5% n/a 0.3%
H&R Block Financial 95 4.5% -15 0.3%
High Frequency Economics 75 4.6% n/a 0.3%
HSBC Markets 70 4.5% -20 n/a
I.D.E.A. 37 4.6% -45 0.2%
ING Financial Markets 115 4.6% n/a 0.3%
Informa Global Markets 110 4.5% -10 0.3%
Insight Economics 100 4.5% n/a 0.3%
IntesaBci 0 4.6% n/a n/a
J.P. Morgan 100 4.5% n/a n/a
Lehman Brothers 80 4.5% n/a 0.4%
Lloyds TSB 110 4.4% n/a 0.2%
Macroeconomic 65 4.5% n/a 0.3%
Merrill Lynch 120 4.5% n/a 0.2%
Moody's Economy.com 120 4.6% n/a 0.2%
Morgan Stanley 60 4.6% n/a 0.3%
National City Bank 66 4.5% n/a 0.3%
Nomura 155 4.5% -10 0.2%
Nord/LB 130 4.5% n/a n/a
PNC Bank 100 4.5% n/a n/a
Promotora Bursatil n/a 4.4% n/a n/a
RBS Greenwich Capital 110 4.5% -15 0.3%
Regions Financial 90 4.5% -15 n/a
Ried, Thunberg & Co. 75 4.5% n/a n/a
Scotia Capital 125 4.5% n/a 0.2%
Societe Generale 140 4.5% n/a n/a
Stone & McCarthy 50 4.5% -26 0.4%
TD Securities 130 4.5% n/a n/a
Thomson/IFR 120 4.6% n/a 0.2%
UBS Securities LLC 120 4.6% n/a 0.3%
Univ. of MD 110 4.5% n/a 0.3%
Wachovia 120 n/a n/a n/a
Wells Fargo 115 4.6% n/a n/a
Wrightson 50 4.6% n/a 0.3%

Adding a little information to the mix:

Consensus forecasts for NFP:
Forex Factory 115K
IKON 113K
Reuters 100K
Briefing.com 100K

The problem with these numbers is that they are dated by several days and during those days the market has absorbed new information on the labour market (ADP report, initial claims, etc). The implied market forecast from the CME auction on economic derivatives shows how the market has downgraded its expectations:

Wednesday 112.5K
Thursday 79.5K
Friday (today) 71.4K

The last auction just closed so these numbers are as good as it gets. I am not making a forecast but I think it is important to be aware of this information.

Here is the link to the CME auction page: http://auctions.cme.com/1331/van_dig_prices.html but you may need password access (free).

all the best

I seem to recall speculation last month that the Russians & Chinese were artificially propelling the GBP/USD pair up and down for their own ends.
How can we legislate for that?

Traders at CME (as interviewed by Bloomberg) were said to be not trading the Revision...

But they were looking at a low NFP number

NICE move!

prior revised from 132K to 154K. upward revision.

FXDD's spread widened to 24 pips during the release...WOW!