The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Posts: 231
What does the data mean to the market?
The headline data of Non-Farm Payrolls (NFP) reflects the change in the number of people employed during the previous month. A higher number of people employed is good for the US economy and would create a buy on the USD. Vice versa, a lower number would be bad for the US and would generate a sell on the USD.
NFP comes out with six lines of data which makes this report far more complex. The other two significant lines of data I watch are the Unemployment Rate and Average Earnings.
With UR a lower number is good for the US and vice versa. Whereas AE a higher number is better for the US economy and vice versa.
All three lines must deviate in the same direction. I will not tolerate a conflict from either UR and AE.
Historic deviations and their outcome
June 4 2021 -116 deviation with some minor conflicts that were not big enough to overpower the shock of the headline. The move was slow and sustained and would have been easy to make some money from this!
Check out the price action here:
https://calendarapi.galaxysoftwareinc.com/l/57168/aHR0cHM6Ly9jYWxlbmRhci5nYWxheHlzb2Z0d2FyZWluYy5jb20vIy9jaGFydDtpPTU3MTY4O3Q9MjAyMS02LTQlMjAxMjozMDowMC4wO3M9VVNESlBZO3I9UzEw
May 7 2021 Today I saw a massive deviation of -734k on the headline Non-farm Payrolls with a supporting +0.3% rise from the Unemployment Rate, and This crushed the US dollar across the board. I managed to bank some excellent profits early on the back of this data as the USD pairs continued to slide south. It was a shame that the Average Earnings conflicted largely. A conflict of +0.7 on this line would have upset the move in standard times, but not today!
Check out the price action here:
https://calendarapi.galaxysoftwareinc.com/l/50023/aHR0cHM6Ly9jYWxlbmRhci5nYWxheHlzb2Z0d2FyZWluYy5jb20vIy9jaGFydDtpPTUwMDIzO3Q9MjAyMS01LTclMjAxMjozMDowMC4wO3M9VVNESlBZO3I9TTE
April 2 2021 A very large deviation to the upside, but accompanied by conflicting Average Earnings, created a whipsaw that we don't like to see. This, therefore, did not hit our triggers and for good reason!
Check out the price action here:
https://calendarapi.galaxysoftwareinc.com/l/35213/aHR0cHM6Ly9jYWxlbmRhci5nYWxheHlzb2Z0d2FyZWluYy5jb20vIy9jaGFydDtpPTM1MjEzO3Q9MjAyMS00LTIlMjAxMjozMDowMC4wO3M9VVNESlBZO3I9TTE
I will use forecasts of:
Average Hourly Earnings (M/M) 0.3
Change in NonFarm Payrolls 720
Unemployment Rate 5.6
US Average Hourly Earnings (Y/Y) 3.6
Today's trade plan
Today the forecast range is smaller than last month, This is good for us as we can tighten the required deviation. I'll be looking for a 200k deviation in either direction from Non-Farm Payrolls without any conflicts from Unemployment and no significant conflict from Average Earnings, We can expect an excellent move. This one can get volatile immediately after the data is released while the market digests the numbers. Hold onto your hats. This one is not for the fai
Posts: 231
Today we saw a +130k deviation from the forecast on the headline, which is sizeable, however not sizeable enough to avoid a conflict from the Unemployment Rate, which today deviated by 0.2 in the opposite direction. We saw USDJPY spike in the direction of the headline before very quickly going in the opposite direction, a reminder of how this report can wipe out your accounts if you're not careful.No profits made, no losses taken. Try next month again.
See Chart here:
https://calendar.galaxysoftwareinc.com/#/chart;i=59294;t=2021-7-2%2012:30:00.0;s=USDJPY;r=S1