Are you looking for an event with the potential to create a stir on the us dollar in particular, and the forex market in general ? And you should know that the United States will release Friday at 12: 30 GMT their monthly report on non-farm jobs. To help you optimize your making pips, here is our usual guide to trading.
Return on the last statement
Last month, the market has had a bad surprise, since non-agricultural employment United States only increased by 98 000. The consensus was, indeed, rather located around 175 000. The readings of the months of January and February were also revised downward. A little more pleasing, however, the increase in hourly wages of 0.2% in line with expectations and the drop in the unemployment rate from 4.7% to 4.5% with a participation rate that remains at 63%.
All in all, the report was relatively poor and the u.s. dollar has logically immersed in the first reaction. Some analysts have, however, begun to highlight that the sector that recorded the worst performance over the period was the construction sector, the main sector affected by the snow storm that hit the north-eastern United States. This decline could, therefore, only be temporary, which explains the rapid rise of the greenback thereafter.
What can we expect this time ?
The expectations of the analysts for this report are located around a creation of 190,000 new hires. Employment would have therefore taken up compared to the previous month. Unemployment could jump from 4.5% to 4.6% and wages grow by 0.3%.
The key indicators tell us that manufacturing PMI rose from 53,3 to 52.8 in April, a figure that reflects volumes of lower production. Regarding the employment of this sector, it has increased for the first time in seven months.
PMI Services has also tripped and password from 57.5 to 52.8, probably because of the weakness of the growth of the business. Regarding the job, the industry has stalled, also, since it records the increase the lowest since 2010.
The PMI manufacturing has followed the same path as the first two indicators, it has dropped down and is located to 54.8 compared to 57.2 initially. The employment component also confirms this slowdown.
Overall, the leading indicators are quite mixed. Hard to say therefore whether there will be a surprise to the upside or to the downside. The historical trends show that there are, roughly, as much chance of seeing one or the other scenario, unlike those of the month of march.
In all cases, keep in mind that the readings of better-than-expected report NFP often trigger a speedy rally of the u.s. dollar on the foreign exchange market. Conversely, when the figures are worse than expected, the greenback is usually sold.