NFP report preview

Today September NFP report is to be published at 12:30 GMT from the US.

What is NFP report?

• NFP or non-farm payroll report is the monthly statistics on labour condition in the US released by US department of labour statistics. The report comprises goods, construction and manufacturing sector companies.
• This report influences the financial markets deeply across asset class.

Key highlights –

• The headline number for total hires last month was 165,000. September ADP employment number was discouraging at 135,000 after August’s encouraging 228,000.

• Today payrolls are expected at 80,000.

• The second most vital component is wage growth which as of now is showing healthy growth of 2.5 percent. Today expected at 2.5 percent y/y.

• The labour force participation rate is showing no signs of rebound. It was at 62.9%, in the last report.

• The unemployment rate is expected to remain same at 4.4 percent.

• The underemployment rate is expected to improve further from current 8.6 percent.

• Average weekly hours were previous 34.4; No major change is expected.

Impact –

• The immediate impact is usually very volatile and today could be more as the market is already agitated by weak economic dockets coming out of the United States.

• A strong report especially the headline number (above 170,000) and wage growth could lead to a recovery in the dollar which has already declined for 6 consecutive months.

• Dollar selloffs could accelerate on a materially weak report of headline below 80,000. The dollar index is currently trading at 93.84, up 0.07 percent so far today.