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Non Farm Payroll

  • #1
  • First Post: Apr 6, 2006 11:50am Apr 6, 2006 11:50am
It is my understanding that the non-farm payroll report is a large momentum indicator report. I am still learning the forex market and how various reports affect the movement. My question is (a) how does this report directly affect the market and (b) in the forecast for the upcoming report, it shows forecast as prior - 243k and forecast - 190k. What are these numbers listed as? Does a lower number mean possible swing long or short for eur/usd?
  • #2
  • Apr 6, 2006 12:05pm Apr 6, 2006 12:05pm
Quoting rcdunn2003
It is my understanding that the non-farm payroll report is a large momentum indicator report. I am still learning the forex market and how various reports affect the movement. My question is (a) how does this report directly affect the market and (b) in the forecast for the upcoming report, it shows forecast as prior - 243k and forecast - 190k. What are these numbers listed as? Does a lower number mean possible swing long or short for eur/usd?
This an excellent question.

The US NFP measures the growth or contraction of jobs in the US. An increase in the seasonal numbers means more jobs are created and a decrease will mean less jobs were created. Negative numbers will mean jobs were actually lost.

A thing to note that the measurement and sentiment is not judged necessarily on a month to month basis, but larger picture (like year over year or seasonal).

An increase above expectations creates the impression that more jobs were created which is a sign of a healthy economy. The setiment is GENERALLY, that this would increase the VALUE of your currency.

So, if NFP shows growth, the USD will gain in value against other currencies. If on the other hand, the NFP shows SLOWING growth (below expectations), the USD will lose value against other currencies.

For those REALLY green traders

high NFP numbers means the USDJPY and USDCHF will rise and the EURUSD and the GBPUSD will fall.

low NFP numbers will result in the opposite.

Generally...

The REASON this is true is because of the combined setiment of what the NFP numbers mean. It's not exactly a clear cut black and white case, which is why NFP numbers may still show growth, but cause a devaluation in the dollar. If a number even hints at slowing growth, the value of the dollar will fall. This is because expectations are generally that more jobs created will increase consumer spending potential (not necessarily increase spending) but also shows that businesses are shelling out more (or less) dough for workers because business is healthy (or sick depending on the direction).
  • #3
  • Apr 6, 2006 5:14pm Apr 6, 2006 5:14pm
Would it be safe to assume that a numbers if they are below consensus would create much more USD downward momentum compared to upside momentum from stronger numbers...

The reason being that the FEDS have openly voiced the very near end to rate hikes. It seems to me that the euro is looking for any excuse to go to the moon while the usd is on the verge of tanking BUT IS PAUSING with regards to undeserved upside help by recently disappointing eurozone data.

The 4c-able end to US rate hikes is weighing on the dollar while the euro is gaining strength from impending rate hike(s)

Correct me if i'm wrong the thing to look for in payrolls on friday is weaker then anticipated payrolls data, which will further solidify the end to rate hikes and dollar weakness.

OR.... a MUCH better then expected number could offset recent FED comments on the end to rate hikes which could help USD reclaim losses from the last few sessions.
  • #4
  • Apr 6, 2006 5:37pm Apr 6, 2006 5:37pm
Quoting wryan
Would it be safe to assume that a numbers if they are below consensus would create much more USD downward momentum compared to upside momentum from stronger numbers...

The reason being that the FEDS have openly voiced the very near end to rate hikes. It seems to me that the euro is looking for any excuse to go to the moon while the usd is on the verge of tanking BUT IS PAUSING with regards to undeserved upside help by recently disappointing eurozone data.

The 4c-able end to US rate hikes is weighing on the dollar while the euro is gaining strength from impending rate hike(s)

Correct me if i'm wrong the thing to look for in payrolls on friday is weaker then anticipated payrolls data, which will further solidify the end to rate hikes and dollar weakness.

OR.... a MUCH better then expected number could offset recent FED comments on the end to rate hikes which could help USD reclaim losses from the last few sessions.
Dealing along the lines of the "Baked in the Cake Theory".

If NFP falls inside BCT{see above} Expect wild movement and subsequenly continuation.

If NFP falls OUTSIDE BCT{see above} Expect wild movement and subsequenly continuation of "New Move"
Trading the News {to me at least} means trading UN-expected news.
  • #5
  • Apr 6, 2006 5:50pm Apr 6, 2006 5:50pm
Bemac, I sure agree with you. It is when something does not go as expected that is the potential for volatility and that is what is needed to make money on short term trades like the news after effects.

SMJ
Quoting Bemac
Dealing along the lines of the "Baked in the Cake Theory".

If NFP falls inside BCT{see above} Expect wild movement and subsequenly continuation.

If NFP falls OUTSIDE BCT{see above} Expect wild movement and subsequenly continuation of "New Move"
Trading the News {to me at least} means trading UN-expected news.
  • #6
  • Apr 6, 2006 6:21pm Apr 6, 2006 6:21pm
In my opinion, NFP and any other single fundamental announcement, barely affect the general direction of a currency. They sure spike the price in the intraday scope, but once the dust settles, the price resumes its merry way as it was meant to.

In the other hand, interest rates (or announcements that might influence the Central Bank rates policy) is where the real sauce of fundamentals is.
  • #7
  • Apr 6, 2006 6:51pm Apr 6, 2006 6:51pm
Quoting WTB
In my opinion, NFP and any other single fundamental announcement, barely affect the general direction of a currency. They sure spike the price in the intraday scope, but once the dust settles, the price resumes its merry way as it was meant to.

In the other hand, interest rates (or announcements that might influence the Central Bank rates policy) is where the real sauce of fundamentals is.
Interesting.

What would you say might influence the Central Bank rates policy?
  • #8
  • Apr 6, 2006 8:15pm Apr 6, 2006 8:15pm
What is/are the best sources to get results of payroll report when released (asap)?
  • #9
  • Apr 6, 2006 9:04pm Apr 6, 2006 9:04pm
CNBC

Bloomberg too, but there kinda pokey...
  • #10
  • Apr 6, 2006 9:31pm Apr 6, 2006 9:31pm
Try google search the word, "Non Farm Payroll" under "News". and Keep hitting search buttom every five minute around the release time.
Looking for pips!!!
  • #11
  • Apr 6, 2006 10:58pm Apr 6, 2006 10:58pm
I trade the news all the time - your best source is needtoknownews - it is live correspondent giving you the numbers as they coem out - the fastest service i have experienced so far - 2nd is marketnews - there fxbulletts are amazing - i have no idea how they disect the information so fast - 3rd use a free service by oanda - 4xcast usually a couple of seconds behind.

hope that helps!
  • #12
  • Apr 6, 2006 11:02pm Apr 6, 2006 11:02pm
Quoting rcdunn2003
What is/are the best sources to get results of payroll report when released (asap)?
Play bloomberg tv just before release time....from my experience they always have the breaking news at the same time it is released.
  • #13
  • Apr 7, 2006 12:21am Apr 7, 2006 12:21am
When I look how traders trade during NFP (high volume and skyrocket reaction both sides) I understand how many traders lose money.


I will not trade today.
kiss the trend
  • #14
  • Apr 7, 2006 12:55am Apr 7, 2006 12:55am
I think traders see the volatility in the NFP, and sometimes it can be too tempting to sit out.

Im lucky, cause i live in a timezone where i could be down the pub at night with my mates when the numbers are out.

However, the best way i believe to trade the NFP or any big news event, if your willing to put your $2 worth in, is identify any channel or pattern established on the 5 min or 15 mins charts, and trade on a CONFIRMED (confirmed meaning, at least wait for the candle to close out of the channel or pattern) breakout. Stop losses usually placed a few pips below entry or within the pattern zone.
  • #15
  • Apr 7, 2006 3:38am Apr 7, 2006 3:38am
Quoting fx-trader777
When I look how traders trade during NFP (high volume and skyrocket reaction both sides) I understand how many traders lose money.


I will not trade today.
I agree. I'm sure there are traders out there who know how to deal with the (often two-way) volatility and make big money from it, but I stand aside during this day. It's the day when everyone gets crazy in the chatrooms, total hysteria. I'm just not an adrenaline guy I guess Good luck and good trading to all the nfp traders.
  • #16
  • Apr 7, 2006 7:31am Apr 7, 2006 7:31am
I'm sittin' here sippin my morning tea, watching http://www.bloomberg.com/media/tv/schedule_us.html live streaming tv on my laptop, my tradestation open on one of my desktop monitors, and MetaTrader4 charts on the other monitor...waiting for the news. I love to get up and watch the craziness. I'm also not affraid of jumping on the bus if i see one leaving the station in the right direction : - )

Happy Trading
Thom

Just out 211,000 jobs just out! Live TV via the net.
  • #17
  • Apr 7, 2006 7:33am Apr 7, 2006 7:33am
isnt this good for the dollar?
  • #18
  • Apr 7, 2006 7:42am Apr 7, 2006 7:42am
truism, it is not the data that counts, it is how the market feels about the data

we still might see a move in one direction, but right now this is the silliest looking NFP in a while, I think because the market expected a bigger move?
I keep a close watch on this chart of mine...
  • #19
  • Apr 7, 2006 7:45am Apr 7, 2006 7:45am
a bigger move? but the market forecasr 184! oh well guess we'll know when the dust settles
  • #20
  • Edited 9:43am Apr 7, 2006 8:37am | Edited 9:43am
my NFP trade:

EURUSD Sell @ 1.2192 two lots upon break of TDTL on 5 min chart in direction of news & trend.

Now both s/l moved to 1.2188

One lot trailing 20 pip s/l
One lot set to t/p at 4hr tunnel @ 1.2132 + 5 = 1.2137

Time will tell... both now showing +36 pips as i post (close at 1.2157)

: )

PS update at 10:40ET 1st lot closed at 1.2137 at +55 pips
second remaining lot runing w/20pip trail-s/l now at 1.2168 (close at 1.2143)
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