When is Non-Farm Payrolls ecoonomic data released (South African Time):
The NFP data will be released at 3.30pm in South Africa on Friday the 2nd February 2018.
What is the Non-Farm Payroll?
The NFP report is treated as a key economic indicator for the United States. The non-farm payrolls measure the number of people in employment in all businesses across the country, excluding agricultural, local government, private household and not-for-profit sectors. This is considered the most comprehensive employment number released – as it represents 80% of the U.S workforce.
Non-Farm Payrolls are reported on the first Friday of the month, whereby the number of additional jobs added from the previous month is released. The report contains valuable insights into the labour force that have a direct impact on the stock market, the value of the U.S. dollar and the price of gold.
Why is it important
Employment is a key indicator of the health of the US economy, and gives traders an insight into future data releases such a gross domestic product (GDP).
The typical relationship is that the higher the number of people employed, will result in higher output. Increasing employment levels boost local economies, driving demand and increasing investor confidence.
A positive outlook attracts investment, boosting the strength of a currency in the short term.
The NFP data release has a history of causing large price movements in the market, giving rise to trading opportunities.
The Strategy:
There are multiple ways of trading the NFP report; there are 3 basic strategies to be aware of:
Traders who take a position early, before the data is announced, in anticipation for the directional movement the event will cause.
Traders who take a position as the data is announced, hoping to scalp a quick profit off the volatility created by the data, be it negative or positive.
Traders may wait for the market to digest the significance of the results, and after the initial swings have occurred, take a position on the side of the dominant momentum.
