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The Nonfarm Payrolls & The Greater Picture

Discussion in 'Fundamental Analysis' started by admin, Dec 4, 2015.

  1. admin

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    The anticipation for the biggest indicator in the forex market just got more intense. The European Central Bank (ECB) had put out a very strong signal that it would push a significant increase to its stimulus program to avoid the growing threat of deflation. Failure to deliver, or in this case half deliver on the central bank’s promises has reduced the market’s trust and raises questions on its ability to communicate.

    If you are planning to trade forex then it's pertinent to mention here that the EUR/USD has surged as the monetary policy divergence trend was broken with the EUR surging more than 3 percent versus the USD.

    U.S. economic indicators have been mixed since the October Federal Open Market Committee (FOMC) meeting. Upward revisions to GDP growth in the third quarter and a rise of durable good orders are balanced against weaker manufacturing and non manufacturing purchasing manager indices (PMI)s.

    Various Fed members have stated the possibility of a rate hike in December. Fed Chair Janet Yellen has been one of the more vocal with comments like “economic conditions falling into place””” ahead of the December FOMC meeting. Employment has been the strongest pillar driving the U.S. recovery and the market is forecasting gains of 200,000 or above. Last month the Bureau of Labor Statistics reported a monster 271,000 gain obliterating the 181,000 forecast. After the ECB disappointment the market will looking for signs that the U.S. part of the equation is still solid.

    The non farm payroll report will be published on Friday, December 4 at 8:30 am EST.
     

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