NFP Friday – 3rd September 2021

With New York dealing with severe floods and Monday is closed for the US Labour Day, will this have an impact on the USD. 

The US dollar was under pressure in the overnight session as investors focused on the non-farm payroll numbers scheduled for later today. Analysts expect the data to show that the economy added more than 750k jobs in August after adding more than 943k in the previous month. This forecast could fall short judging by the weak data published by ADP on Wednesday. The unemployment rate is expected to drop while wages are expected to rise by 4.0%. The currency will also react to the ISM non-manufacturing PMI, which is an important gauge considering that the sector is the biggest employer in the country. 

Wednesday’s ADP report revealed that the US economy added only 374K private jobs in August versus more than 600K expected.  

A strong NFP figure today, close to a million for the second straight month, would boost the idea that the Fed could start tapering its bond purchases as soon as November. While a soft figure, ideally below 500K, could revive the Fed doves and push the expectations of Fed tapering to the end of this year, or the beginning of the next. 

In both cases, we shall see equities claiming new records. Good jobs data is a sign of strong economic recovery and that’s good news for businesses and company earnings. While bad news is a reason for the Fed to maintain a soft policy stance for longer, which is even better as cheap liquidity does a better job in pushing equities higher than strong fundamentals. 

In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.4%, S&P 500 up 0.3%, and Nasdaq Composite up 0.1%. Both the S&P 500 and Nasdaq finished at all-time high closing records. 

The Japanese Nikkei 225 index was up 2.0%. In China, the Shanghai Composite was down 0.4%, while the Hang Seng index in Hong Kong was down 0.7%. The S&P/ASX 200 in Sydney was up 0.5%. 

Here at today’s high impact events to trade.

Times are GMT+3.

  • 15.30 – US – Average Hourly Earnings m/m, Non-Farm Employment Change, Unemployment Rate  

Potential instruments to Trade: USD Crosses.   

  • 17.00 – US – ISM Services PMI  

Potential instruments to Trade: USD Crosses. 

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