NFP report preview

Today October 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 -33,000. October ADP employment number was very encouraging at 235,000 after September’s discouraging 135,000.

• Today payrolls are expected at 310,000.

• The second most vital component is wage growth which as of now is showing healthy growth of 2.9 percent. Today expected at 2.7 percent y/y.

• The labour force participation rate is showing no signs of rebound. However, it was up 0.2 percent to 63.1 percent, in the last report.

• The unemployment rate is expected to remain same at 4.2 percent.

• The underemployment rate is expected to improve further from current 8.3 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 300,000) and wage growth could lead to a rise in the dollar which has been struggling this week.

• Dollar selloffs could accelerate on a materially weak report of headline below 200,000. The dollar index is currently trading at 94.7, up 0.07 percent so far today.