Non-Farm Payrolls Preview - Next release due at UTC 12:30 PM Friday, April 07th, 2023
Skilling NFP Preview
US Labour market continues to remain robust
United States Nonfarm Payrolls expected to report +200,000 new jobs
Summary:
- US inflation remains elevated
- No major banking “crisis” has emerged
- The Fed has been attempting to “cool” or “slow down” the US economy without crashing the economy
- US jobs market remains tight and the economy is still producing +200,000 new jobs per month
The US Dollar Index looks distressed
Markets seem to remain undecided if the US will avoid a recession or not following the March madness around the collapse of a few US investment banks. It remains to be seen if the rapid pace of US interest rate hikes during the previous months is having the desired economic slowdown effect the US Fed is betting on.
The US Dollar index has lost -2.79% during the last 30 days against a basket of G10 currencies
The weaker USD has produced wide price changes across the commodities markets
- The market driver behind the very strong gains across the precious metals markets seems to be based on speculation that the US remains at risk of falling into a recession
- Recent manufacturing data suggested that prices paid by manufacturers fell during March
- The lower prices manufacturing seem to have paid during March could be a signal that “inflation is slowing” at least in the manufacturing sector
- Lower inflation outlook adds downside pressure for the USD, which has resulted in higher prices for gold and silver
| Commodity market | Last | 30 day % change |
|---|---|---|
| Silver | $23.94 | 12.63% |
| Sugar | $22.40 | 7.07% |
| Gold/Australian Dollar | $2,934.50 | 7.06% |
| Gold | $1,981.24 | 6.77% |
| Gold/Euro | $1,816.65 | 4.12% |
| Cocoa | $2,868.00 | 3.91% |
| Corn | $667.75 | 3.57% |
| Platinum | $995.00 | 1.02% |
| Crude Oil WTI | $80.42 | 0.93% |
| Soybean | $1,518.00 | 0.86% |
| Aluminum | $2,386.75 | 0.12% |
| Copper | $8,917.00 | -0.42% |
| Wheat | $690.00 | -1.25% |
| Crude Oil Brent | $84.87 | -1.30% |
| Cotton | $81.63 | -1.85% |
| Nickel Cash | $23,178.50 | -4.95% |
| Zinc | $2,923.67 | -5.70% |
| Coffee | $178.63 | -7.75% |
| Natural Gas | $2.10 | -30.31% |
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Data as of April 04 2023 12 pm UTC
Next US Jobs report:
Friday, April 07th, 2023 - UTC 12:30 PM
On the 1st Friday of every month, investors expect the release of the US nonfarm payrolls (NFP) report.
Last month's US Nonfarm payrolls report for January surprised markets with 311,000 new jobs created vs the 200,000 number many financial analysts had been expecting for the January number.
The March NFP is due on April 07th and the same analysts are again calling for +200,000 new jobs created during the March period.
| Date & Time | Country | Event | Previous | Forecast | Current Unemployment Rate |
|---|---|---|---|---|---|
|
Apr 7, 2023 1:30 PM GMT |
United States | Nonfarm Payrolls (NFP) | (February) 311,000 |
(March) 240,000 to 250,000 |
3.6% |
If unemployment can increase, the Fed will have room to pause the current rate hiking cycle
- But that is unlikely to happen at a fast pace
- The US economy will need a lot more time to slow down to the point that unemployment increases significantly for the Fed’s target of 2% inflation to be achieved
If US unemployment continues to remain near 53 year lows, the Fed will be forced to take even more aggressive action to bring back price stability and tame inflation
- The US economy needs to slow at a much faster pace, thus an even lower unemployment rate will increase the risk for the Fed to take aggressive action
- Current stock markets are trading as if a US recession can be avoided, US100 has gained +20% already during 2023
- The recent banking crisis did not slow down the stock market advance, as traders and investors saw the collapse of a few investment banks as a “cleaning up” of the higher-risk financial firms while the banking sector as a whole seems to be holding up
NFP Day Asset Focus
The below table illustrates the year-to-date (January 2023 - April 4 2023) percentage change of various assets vs the USD.
| Product vs USD | 2023 % change |
|---|---|
| Bitcoin | 74.17% |
| Sugar | 20.09% |
| US100 | 19.43% |
| Cocoa | 10.92% |
| Mexican Peso | 9.84% |
| Gold | 7.70% |
| SPX500 | 6.92% |
| Coffee | 5.69% |
| British Pound | 3.18% |
| Euro FX | 1.11% |
| Crude Oil Brent | 1.06% |
| Crude Oil WTI | 0.92% |
| Dow 30 | 0.81% |
| Canadian Dollar | 0.57% |
| Swiss Franc | 0.23% |
| Silver | -0.30% |
| Cotton #2 | -0.84% |
| Aluminum | -0.91% |
| New Zealand Dollar | -1.00% |
| Soybean | -1.03% |
| Australian Dollar | -1.60% |
| Japanese Yen | -2.66% |
| Corn | -4.20% |
| South African Rand | -4.22% |
| Platinum | -6.19% |
| Wheat | -13.05% |
| Palladium | -18.17% |
| VXX | -21.32% |
| Natural Gas | -45.87% |
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Data as of April 04 2023 12 pm UTC
So, what happens to risk assets if Friday’s US NFP report signals yet again that the US jobs market remains hot?
Will the upcoming NFP release support the prevailing asset price trends to continue or will old trends end and new trends emerge?
Don’t miss the nonfarm payrolls (NFP) event due on April 07, 2023, at 12:30 UTC!
Trade safe.
Not investment advice. Past performance does not guarantee or predict future performance.
