Market Brief 07 July: Nonfarm Payrolls today
One of the most traded days of the month is finally here! The day will offer five major catalysts for action and potential opportunties for trading.
GBP 09:30 a.m. GMT +1, Manufacturing Production (MoM) (May)- since the pound dollar is the second most traded pair in the foreign exchnage market, this event will ba highly observed as it usually has significant impact on the sterling. Expectations are for an increase of production in the manufacturing sector at 0.5% compared to 0.2% from the pediod before. If the actual reading is a lot higher than expectatition, this should boost the value of the pound. On the other hand, if production has slowed down, this should be read as a bearish sign for the currency.
USD 13:30 p.m. GMT + 1, Nonfarm Payrolls (Jun)- the most widely known and one of the most talked about numbers will pick up the levels of volatiltiy. Market analysts predict an increase in the employemnt of the private sector by 41, 000 people. So, expectations for the month of June are 179, 000 employed compared to 138,000 employed in May. It’s useful to note that often the market prices in those expectations (i.e. traders are trading analyst expectations). This is the so called adage of “byuing the rumours and selling the facts”. So, a higer than expected result, should be read as bullish for the U.S. dollar, while a strikingly lower reading could make its value drop.
USD 13:30 p.m. GMT+`, Unemployment Rate (Jun)- analysts see the rate remaing at the same level at 4.3%, same as for the period before. If the rate comes in higher then expected, this means unemplyment has increased, and the value of the dollar should fall. Conversely, if the actual ratec comes out a lot lower than predicted, this should increase the value of the currency.
CAD 13:30 p.m. GMT+1, Employment Change (Jun)- crucial number showing how many jobs were added in the month of June. The analyst consensus forcast is for 10, 000 jobs added in June, compared to 54, 500 added in May. If the actual reading shows an uprise compared to predictions, this should boost the Canadian dollar. Conversely, if less jobs were added (which will affect ngeatively consumer spending), this should be a negative sign for the currency.
GBP BoE Mark Carney speaks (time still not fixed)- the head of Bank of England has crucial influence on setting up interest rates, monetary policy and thus the value of the British pound.
CAD Ivey PMI (Jun)- here we find infiormation on company performance in the country which is a driving factor in the expansion or contraction of the overall economy. Performance above 50 shows expansion while below 50, the economy could be shrinking. A better than expected reading should boost the Canadian dollar, while a lower number should be taken as a bearish signal.
Wishing you successful trading!
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