NFP data is one of the most important on the market.

5 paź 2018

Statistics on the US labor market has traditionally caused an increased interest among investors and traders around the world and leads to spikes in volatility across all ranges of the financial market. Statistics on the US labor market includes the following set of indicators:

Pre-Forecast

15:30 USA NFP 201K 188K
15:30 USA Average hourly earnings (m / m) 0.4 % 0.3 %
15:30 USA Unemployment rate 3.9 % 3.8 %

The importance of these data is primarily since the labor market is one of the main barometers of the state of the country's economy. In addition, in the conditions of tightening the monetary policy of the Fed, the data is even acquiring a double value. Since the figures for the NFP and the unemployment rate give an idea to the Central Bank of what the overall state of economic activity in the country. And the average hourly wage allows you to estimate the current and future trends in inflation in the country. A salary increase means an increase in inflationary pressure, and a decrease in salary means a decrease in it. The growth of inflationary pressure is a signal for the Central Bank to tighten monetary policy.

Recall that in 2018, the US economy and the labor market, feel just great. Unemployment is at 16-year lows, the average NFP is around 200K, and hourly wages show steady growth.

There are quite a few reasons for this:

- Trump's tax reform and increased economic activity in the country;

- Trump's trade wars are ultimately aimed at protecting domestic producers, which again improves their positions and positively affects the labor market;

- High oil prices stimulate an increase in production, open wells and ultimately create additional demand for labor.

Traditionally, on the eve of promulgation of official statistics from the Department of Labor, they publish data on employment in the US private sector from ADP. This time they turned out to be much better than forecasts: + 230K with a forecast of + 184K. This is the maximum increase over the past six months.

Today we are waiting for good data in general, and the NFP, in our opinion, will be better than expected. All this - the reason for buying the dollar.