The US Non-farm Payrolls report will dominate market price action for tomorrow, and our research shows that price moves may be significant regardless of outcome. The consensus forecast for January's NFP gain has been raised to 165k from a lower 155k predicted last week. This indicates that investors have gained more confidence in the US economy as personal income and consumption are expanding, and house and job markets gradually improve. In the next session, NFP will weigh on all the pairs related to the greenback based on traders' intuition. But the big question is - how much and in what way will the report influence short-term moves?
The following table summarizes the Non-farm Payrolls numbers in 2012 and one-minute changes for the Dollar Index after reports were released. The average change for the 11 samples is 7.6 points, which significantly differs from the average one-minute change in 2012 - effectively zero. More specifically, the Dollar Index rose by an average of 10 points when the NFP reading exceeded estimations. Even when reports came worse than forecast, the Index still moved up by 4 points on average. That means no matter what the Non-farm Payroll figure will be tomorrow, it may push the US Dollar Index slightly higher.
Non-farm Payrolls in 2012 and the one-minute change for the Dow Jones FXCM Dollar Index
|Date||Time||Survey||Actual||Better-Than- Expected||Total Ticks||Average Open||Average Close||Change|
If the payrolls reading beats expectations, the past year shows we can anticipate a 10 point gain in the Dow Jones FXCM Dollar Index in the following minute of trading.
|Fri Feb 1||13:30||USD Change in Non-farm Payrolls (JAN)||High||155K||155K|
|13:30||USD Unemployment Rate (JAN)||High||7.8%||7.8%|
|15:00||USD ISM Manufacturing (JAN)||High||50.5||50.7|