Be Prepared! U.S. Non-Farm Employment Change Tomorrow At 12:30 GMT

Courtesy of Forexyard

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 tomorrow, Friday, May 7, 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. For more information about the U.S. Non-Farm Employment Change, please read below.

What is the Non-Farm Employment Change Report?

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 (CESP) 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 this past Wednesday’s 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 the global economy 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.

Forecast for the Payrolls Report and the USD

If the actual figure will be higher than forecasted, meaning the actual jobs added to the U.S. economy are more than expected, traders are likely to see a bullish run to the USD. Market expectations for the report are for 197,000 new jobs to be added to the economy. The previous month’s numbers came in at 162,000 new jobs.

Currently, investors are looking for signs that the U.S. economy is beginning to accelerate. A strong Non-Farms report has the ability to show this change and significantly alter the environment in the forex market.

As the dollar continues to strengthen in light of the Greek fiscal crisis, market sentiment is heavily in favor of the dollar. A Non-Farm Payrolls release that is inline with expected results, or results that surpass market expectations, are likely to continue the bullish trend on the USD as it will provide positive market sentiment and signal that the U.S. economy is improving at a faster pace. Therefore, the EUR/USD could fall to its lower support line at a price of 1.2750.