The Effect of NFP on the Market

There is a fundamental indicator that is a reference for institutional traders besides interest rate movements from the central bank, namely the United States Non Farm Payroll (NFP), which is published every weekend at the beginning of the month. The NFP report is arguably the basis for the movement of the US dollar.

Usually, non-farm payrolls data is announced by the US bureau of labor (BLS) every month on the first Friday of the week, between 19:30 or 20:30 WIB. This schedule can change at any time if it coincides with a national holiday or there are unexpected obstacles. However, the NFP is often published in a timely manner along with a series of other United States employment data such as the unemployment rate, labor force participation rate, average hourly wage growth, and so on. Compared to all other United States employment data, NFP has a big influence as previously stated, forex traders who are quite happy to monitor developments in fundamental data of course usually monitor various economic indicators to look for clues about the direction of a country’s economic growth.

Apart from US-NFP, some economic data that traders usually monitor include the following:

Consumer Price Index (CPI)

CPI is a fundamental indicator used by many countries to measure inflation rates and is used as a policy benchmark. This data is usually released monthly and has a fairly high impact on currency values.

It is not uncommon for central banks to determine policy directions that have a high impact on financial markets because of their country’s CPI performance. No wonder the influence of CPI data from countries of origin for major currencies is included in the list of frequently awaited forex news.

Housing Data (Housing starts, New home sales)

US housing data is one of the most complete data on a country’s property world. Periodically, several company data are released, each of which has a low, medium, to high impact on the financial market. However, there are times when housing data has a bigger impact than usual.

Gross Domestic Product (GDP)

Traders who like fundamental analysis, of course, will be familiar with this one data. GDP is the main fundamental indicator used to measure a country’s economic growth.

Initial Jobless Claims

Initial jobless claims are the number of new applications or claims submitted by individuals to obtain unemployment benefits from the government. Reports related to this indicator can provide early indications before the release of data on the unemployment rate and economic conditions of a country, besides that this data also has an impact on investors’ outlook on financial markets.