We at FOREXYARD, encourage our customers to get involved in the most intense market events. As such, we think you should know that U.S. Non-Farm Employment Change figures are expected on Friday, November 7th, 13:30 (GMT), and you need to be prepared. Market events like this one tend to create either big changes to current trends or push current trends even further. Generally, the Majors are the ones most affected by market events in general, but Crude Oil, Gold prices, and even the price of Silver can change dramatically in the seconds after such a publication. For more information about the U.S. Non-Farm Employment Change, please read below.

What is the Non-Farm Employment Change?

The U.S. Non-Farm Employment Change, also known as “Non-Farm Payrolls” (NFP) and the “Employment Report,” is a monthly economic indicator used to measure the change in the number of employed people, excluding the farming industry.

Each month the Current Employment Statistics Program surveys about 150,000 businesses, representing approximately 390,000 worksites, in order to provide detailed industry data on employment, work-hours, and earnings of workers on non-farm payrolls for all 50 U.S. states. The survey is then published on the first Friday of each month.

The NFP is an important leading indicator that also affects consumer spending, which accounts for a majority of overall economic activity. Traders value the indicator with the highest importance as its early monthly release can set the tone for the rest of the month’s market movement. Investors should also note Wednesday’s 13:15 (GMT) release of Automatic Data Processing Inc.’s (ADP’s) estimate of Non-Farm Employment Change. In the past, ADP has provided an accurate assessment of what was to come from the actual NFP release two days later. With the volatility of world economies in recent months, however, ADP has not been able to correctly estimate the Non-Farm Payroll outcome, only strengthening the real power behind Friday’s news release.

If the Survey Comes Inline With Market Forecasts

Expectations for this month reveal that the Non-Farm Employment Change figures are forecasted to drop to -200K from last month’s -159K. Such a decrease, or the possibility that this figure will drop further than this mark, will be a continuation of the devastating decline in employment numbers that the U.S. economy has experienced since April of this year. The recent economic struggle, which is being fought vehemently by the U.S. government, has created doubt in the market for the USD, which is driving its value lower. Considering that this survey has delivered negative figures for several consecutive months now, another sharp drop could signal a reversal to the USD’s bullishness. This would mean the USD could be facing a very unfortunate weekend, causing the EUR/USD pair to rise beyond the 1.3000 level once again.

If the Survey Will Surprise With Bullishness

If the actual figure is higher than forecasted, traders are likely to see a continuation of the recent bullish movements. Currently, investors are setting their positions on the USD based on the assumption that by the end of the week, the USD should face a bearish reversal. However, in case the survey delivers better figures than expected, such as a figure of -150K instead of the forecasted -200K, investors might be compelled to reevaluate their strategies and go long on the USD. In this turn of events, the USD may receive an extra boost that will help extend its bullishness, and the EUR/USD could head toward a price near 1.2400.

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We at FOREXYARD, encourage our customers to get involved in the most intense market events. As such, we think you should know that the U.S. Advanced Gross Domestic Product (GDP) figures are expected tomorrow, October 30th, at 12:30 (GMT), and you need to be prepared. Market events like this one tend to create either big changes to current trends or push current trends even further. Generally, the majors are the ones most affected by market events in general, but Crude Oil, Gold prices, and even the price of Silver can change dramatically in the seconds after such a publication. For more information about the U.S. Advanced GDP, please read below.

What is the Advanced Gross Domestic Product (GDP) ?

The Advanced Gross Domestic Product (GDP) is a survey that is being used to measure the annualized change in the value of all goods and services produced by the relevant economy. It is defined as the total market value of all goods and services produced within the U.S. economy in one quarter, in this case the 3rd quarter. The survey is released on a quarterly basis and it measures the differences compared to the same quarter in the previous year. There are 3 versions of the GDP, released one month apart – “Advanced”, “Preliminary” and “Final”. The “Advanced” estimates are based on source data that is incomplete or subject to further revision by the source agency, while the adjusted figures are delivered through the ‘Preliminary’ version.

Traders follow this survey very closely because it is considered to be the broadest measurement of economic activity and a primary gauge of an economy’s health.

If the Survey Comes Inline with Market Forecasts

Expectations for this quarter reveal that the Advanced U.S. GDP figures will probably fall from 2.8% on the ‘Final’ publication to -0.5% on the ‘Advanced’.

Previous surveys have shown that GDP publications that go inline with market forecasts tend to leave the Dollar unchanged. They have also shown that in cases where publications have beaten analysts’ forecasts, the market was greatly impacted, and the USD had instantly rose, usually in a dramatic trend.

Because of the perceived economic weakness in the U.S. economy, any measure above the forecasted value may act as a positive that could return the USD’s previous bullish run against the EUR. We may see a EUR/USD rate of 1.2700 continue through the week’s end.

If the Survey Will Surprise With Bearishness

When the actual figure is lower than forecasted, investors are likely to see the USD depreciating against its currency pairs and crosses.

Previous indicators relating to consumer spending, sentiment, and retail sales all came in below their expected values. Also the failure of Lehman Brothers in September caused major turbulence in the financial markets during the third quarter. American citizens may have been spooked by this event and kept their spending tight in the previous quarter. GDP numbers may be negatively affected as private consumption contributes a large percentage of the calculation. This leads us to believe that Advanced GDP may fail to meet expectations and send the USD lower against the EUR, possibly to the 1.3000 level.

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