FXTM information and reviews
OctaFX information and reviews
XM information and reviews
FXCC information and reviews
FxPro information and reviews
HFM information and reviews

Will the Nonfarm payrolls report make any sound on Good Friday?

31 March 2021

The latest monthly Nonfarm payrolls report will probably show on Good Friday at 12:30 GMT that the relaxation of lockdown restrictions, the drop off in covid cases, and the progress in the vaccination program have enhanced the recovery in the US labor market even without Biden’s latest fiscal boost. While the data may be overstating the continuous employment improvement, it could raise volatility in the dollar during a low liquidity day.

US employment to pick up steam in March

The US economy is said to have almost doubled February’s job growth in March, with employment expected to advance by 639k when the data come out on Friday compared to 379k seen previously. More importantly, the pickup in jobs is forecast to have pressured the unemployment rate lower to 6.0%, suggesting that although there is still a large slack in the labor market, economic conditions are moving in the right direction.

Jobs data likely overstating the unemployment rate

From the first glance, the above results could be another boon for the US economy and for Biden’s presidency, as eurozone nations are grappling to meet their vaccine targets. On the flip side, the participation rate has been stable since July despite the upward-trending job numbers, likely providing some warnings that misclassification errors may be understating the real unemployment numbers.

It is likely that millions of people are not actively seeking a job, and therefore are not considered as unemployed, as the uncertainty around the virus development, the disappearance of employment opportunities, and the virtual schooling, which forced some parents to stay at home, have likely pushed this group of people out of the labor force.

Hence, the headline unemployment rate may be an incomplete guide to the trajectory of the labor market, somewhat explaining the Fed’s decision to maintain its policy accommodative at current levels until it meets its target of full employment conditions.

The US is a step ahead

Undoubtedly the global economy is not out of the woods yet, as no one is certain when and if the vaccines will fully contain the virus and its new variants. However, relative to other rich economies, the US is a step ahead, with investors pricing in that the faster vaccines get put into arms, the sooner it will emerge from lockdown measures and the sooner will the stimulus be scaled down, especially if the rise in inflation overshoots the Fed’s limits.

Moreover, investors are aware that the combination of the current accommodative monetary policy and the additional $1.9 trillion fiscal support could produce stronger economic readings in the coming months. Therefore, another upbeat report on Friday may not be a big surprise, though given the low liquidity during the Easter holidays in the US and Europe, the NFP report may generate sharp volatility in the US dollar after months of muted impact if it deviates significantly from forecasts.

US dollar reaction

The ADP private employment report on Wednesday could provide some clues about what to expect from the official NFP release, while on the same day Biden will unveil his new infrastructure plan, likely promising more hiring for Americans. The latter may trigger some selling in the greenback and stocks before the NFP announcement if the President endorses corporate and income tax increases to help him pay for his new bill. Still, a potential hike in taxes may not be bad news for the dollar, or at least it could generate only a mild selling since any tax increases may only partially repeal Trump’s tax cuts while easing some concerns about the mounting debt levels.

Looking at dollar/yen, the pair is marking its second week of gains, unlocking a new one-year high of 110.96 on Wednesday. The pair seems to be trading in the overbought territory according to the RSI but the indicator has yet to reverse to the downside, keeping the short-term bias on the upside. Should the price overcome the 110.95 – 111.35 resistance region, the rally could face another key obstacle within the 111.70 – 112.20 zone.

On the downside, the 109.73 – 109.35 region may act as immediate support ahead of the 20-day simple moving average (SMA) seen around 109.00. Lower, the surface of the broken ascending channel may again attempt to provide a safety net to balance stronger selling pressures.


Share: Tweet this or Share on Facebook


Dollar flat as market braces for central bank decisions later in the week
Dollar flat as market braces for central bank decisions later in the week

The dollar was up modestly in early trading in Europe on Monday, at the start of a key week for central bank meetings on both sides of the Atlantic. By 03:00 ET (08:00 GMT), the dollar index...

30 Jan 2023

Mega Central banks, OPEC, NFP & Earnings week
Mega Central banks, OPEC, NFP & Earnings week

China Stock market returns from Luna New Year break. Chinese stocks rose while most other Asian equities fell as investors looked to interest rate decisions scheduled this week in the US...

30 Jan 2023

XAU/USD remains on the defensive around $1,925 ahead of US PCE
XAU/USD remains on the defensive around $1,925 ahead of US PCE

Gold price remains on the defensive for the second straight day amid modest US Dollar strength. Thursday’s upbeat US macro data fuels hawkish Fed expectations...

27 Jan 2023

XAU/USD retreats from multi-month top amid modest USD recovery, ahead of US GDP
XAU/USD retreats from multi-month top amid modest USD recovery, ahead of US GDP

Gold price pulls away from a fresh multi-month top amid a modest US Dollar strength. Bets for smaller rate hikes by Federal Reserve, recession fears should help limit losses...

26 Jan 2023

Microsoft: Still Trapped Within Descending Channel
Microsoft: Still Trapped Within Descending Channel

Microsoft Corp., an American multinational technology conglomerate currently ranked the third largest company by market capitalization ($1.728T) which actively engages...

24 Jan 2023

Same story new week
Same story new week

Chinese New Year celebrations – many centres are closed in Asia. Treasuries sagged to end on a bearish week. USDIndex at 101.30 low as the market continued...

23 Jan 2023

Editors' Picks

FXCM information and reviews
ActivTrades information and reviews
RoboForex information and reviews
MultiBank Group information and reviews
MultiBank Group
Libertex information and reviews
Vantage information and reviews

© 2006-2023 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.