Market overview (2016.03.04)

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Market overview(2016.03.04)

Source: ACFX Forex Broker (Review and Forex Rebates Up to 85%)

 

This afternoon at 1:30 pm London time the Bureau of Labour and Statistics publishes its latest monthly Non-Farm Employment Change data.

This publication is part of the Jobs Report that also includes the Average Hourly Earnings and Unemployment Rate releases.

The NFP report gives investors’ information on the number of new employees hired during the prior month.

Market participants monitor all the components that make up the Jobs Report. However, the NFP does tend to have an overbearing impact on the market and can cause large amounts of volatility in all liquid asset classes and the forex market.

The NFP, Average Hourly Earnings and Unemployment Rate reports are published very early after the end of the prior month. Therefore, they can give traders and investors an early warning of economic changes. As such, the Jobs Report is a valuable tool for helping one to decide if new risk should be taken or if current exposure management should be modified.

Jobs related data such as the NFP is important because it is a barometer of the conditions of the United States economy and is also a leading indicator of possible changes to consumer spending.

The market consensus expects to see 195.000 new vacancies to have been filled in February. Today’s forecast if realized would be an increase from the previous 151.000 places that were reported in the prior months release.

The overall trend of the data continues to be positive, however, it is important to consider the NFP data together with the effect on wage levels, released at the same time. The Average Hourly Earnings data, this time, is expected to drop to 0.2%, down from 0.5% of the previous release.

The Federal Reserve would welcome a rise in the level of wages as this will mean that the low-interest rate policy could be relaxed further over the coming year.

Should the NFP actual announcement exceed, the market estimates the US Dollar price would usually strengthen against its major pairs.

High volatility around the time of the Jobs Data releases should be anticipated.

 

Below are today’s major news releases

 

Time Currency affected Importance Release Frequency Forecast Prior
1:30 PM CAD High Trade Balance Monthly -1.0B -0.6B
1:30 PM CAD High Labor Productivity Quarterly 0.2% 0.1%
1:30 PM USD High Average Hourly Earnings Monthly 0.2% 0.5%
1:30 PM USD High Non-Farm Employment Change Monthly 195K 151K
1:30 PM USD High Trade Balance Monthly -43.5B -43.4B
1:30 PM USD High Unemployment Rate Monthly 4.9% 4.9%
3:00 PM CAD High Ivey PMI Monthly 66.0

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