The US releases its October jobs report today at 16:30 MSK. The consensus expects +65 thousand new non-farm jobs after a weak +29 thousand a month earlier.
Non-Farm Payrolls is the increase in US jobs excluding agriculture. The market uses this figure to assess how strong the American economy is.
For a trader, this is the main release of the week for the dollar. Half an hour later the preliminary Michigan index comes out, so the move could last until 17:00 MSK.
What three figures are being released?
Three figures come out in one minute, at 16:30 MSK.
- Non-Farm Payrolls - forecast 65K, previous 29K. This is the increase in non-farm jobs.
- Unemployment - forecast 4.2%, the same as in September
- Average hourly earnings for the month - forecast +0.3% versus +0.1%
What else is on the calendar?
The jobs day doesn't end there. Two releases around the report are worth keeping open in the economic calendar.
- 17:00 MSK. Preliminary Michigan Consumer Sentiment and consumer inflation expectations. Michigan is the US consumer sentiment index.
- 10:00 MSK. German industrial production was already released in the morning.
Why did the dollar come in weak?
The dollar came into the report weak. The week consisted of two moves for it.
- Elections. On Wednesday DXY lost about 0.5% and fell to 101.35 - a four-week low. This happened after the midterm elections, where the Democrats took Congress. DXY is the dollar index against a basket of currencies.
- Yields. On Thursday the index rebounded to 101.70 on falling US Treasury yields.
Where are the markets ahead of the data?
The setup ahead of the figure is as follows.
- EUR/USD - holding support at 1.1200
- GBP/USD - around 1.3470
- USD/JPY - at 157.80; pressured from above by the Bank of Japan's hawkish rhetoric and the risk of intervention
- AUD/USD - fell to a three-week low of 0.6940 after comments from RBA official Hauser
- Gold - above $4,100 per ounce; before that there was a failed attempt to hold above $4,147 and a pullback to $4,047
- December WTI - rebounded from $86 above $90 on escalating tensions around the Strait of Hormuz
What does this mean for trading?
Everything is decided by the deviation from the forecast. There are two scenarios.
- Scenario A. The figure is far from the forecast - sharp impulses in DXY, gold and indices. In the first minutes spreads widen and slippage appears.
- Scenario B. Employment is close to 65K - the reaction is short. Attention immediately shifts to Michigan at 17:00 MSK.
Key point: the benchmark of the day is 65K. The further the actual figure is from this number, the stronger the move in the dollar, gold and indices.
If you trade days like this, it's worth taking into account when choosing a program: you can find a challenge to match your style in advance.
Waiting for 16:30 with an open position?
The half hour after the jobs report is the most expensive time of the month. The spread widens, and your stop fills at a price you never saw on the chart. Prop firms treat this differently: some prohibit holding a position in the window around the release, others impose no restrictions at all. This point is worth finding in the rules before the figure comes out. The style filter will leave only those programs where news trading is allowed.