How to trade the Nonfarm Payrolls Report of Feb 7 2014?
The US Non Farm Payrolls publication is considered as one of the most important indicators that measures the economic health.
US NFP
Employment also measures the change in number of employed people during the
previous month, excluding the farming industry. A rising trend has a positive
effect on the country’s currency.
It is widely expected that the labor market will add 185,000 jobs higher than
the previous reading (only 75.000 jobs) while the unemployment rate is expected
to remain unchanged at 6.7 %.
Accordingly, the expected reaction scenarios will be as
follows.
*The Upside/Bullish Scenario
We can see an increase of the employment numbers during
the last month as expected (185.000). Also it can upbeat expectations and jump
to breach up the barrier of 200 000 jobs. In this case, we can expect
a rebound of the U.S. dollar, on the basis that this scenario may encourage the
Fed to taper further the quantitative easing program. And it will continue reducing
the monthly asset purchases until they ended later this Year.
*The Downside/Bearish Scenario
On the other hand, there is great anxiety that the Fed is moving ahead to slow easing, just as some disappointing data, like Monday's ISM manufacturing survey, is signaling a slowing economy.
For this reason, Friday U.S. Nonfarm payrolls report is the major economic news event for this week. And please remain cautious in trading during the news.
And of course we will update you with the major economic news, the NFP report and the daily Forecast analysis on our Daily Newsletters:
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