Market Outlook: Nonfarm Payrolls


 The main American employment data, Nonfarm Payrolls (NFP) will be published tonight at 9.30pm. Since the beginning of this week, several key employment data have been published and on average show that the labor market in the country is in the "cooling labor market" phase where it will have a downward effect on inflation readings in America. However, the employment data that will be published tonight will be a conclusion on the actual labor market situation.

Prior Expected Data

Nonfarm Payrolls 170,000 199,000

Unemployment Rate 3.80% 3.90%

Wage inflation, Average Hourly Earnings, 3.90% 4%

At the December 2023 FOMC meeting, Fed committee members gave the impression that interest rate cuts of 75 basis points will be implemented this year. But the question playing in the market is when it will be implemented. In the last week of December 2023, the market is seen to have expected interest rate cuts to be implemented in March 2024, however after the release of the minutes of the recent FOMC meeting, the Fed is seen to maintain interest rates for a longer period but the interest rate cuts will be implemented as well as erasing expectations that the interest rate cut will be implemented in March 2024. Therefore the production of data tonight is very important in finding new clues.

NFP's Impact on the Market Tonight

The American dollar will register a strengthening if the NFP tonight manages to register a total of 200,00 - 250,000 readings along with "Wage inflation" data readings of 4.0% and above.