NFP report preview

Today NFP report is to be published at 12:30 GMT from US.

What is NFP report?

• NFP or non-farm payroll report is the monthly statistics on labor condition in the US released by US department of labor statistics. The report comprises goods, construction and manufacturing sector companies.
• This report influences the financial markets deeply across asset class.

Key highlights -

• Headline number for total hires last month was 223,000. May ADP employment number bounced back after two consecutive months of disappointment to 201,000 slightly higher than market expectation of 200,000.

• Today payrolls are expected at 225,000.

• Second most vital component is wage growth which saw a rebound by 2.2% in the last report; market is expecting another solid gain today.

• Labor force participation rate is showing no signs of rebound. It was at 62.8%, in last report.

• Unemployment rate is expected to remain the same at 5.4%.

• Average weekly hours were previous 34.5. No major change is expected.

Impact -

• Immediate impact is usually very volatile and today could be more such as decision by FED looms this month.
  
  
• A strong report especially the headline number and wage growth could further strengthen dollar which is doing extremely well this week so far. Dollar index notably has post bullish hammer candle.
  
  
• Dollar will halt its gains and focus on downside, if report surprises to downside.
  
  
• Instruments to watch - Euro (major support lies at 1.118), gold (broken but hovering close to key support at $1178), yen (waiting to break the resistance at 125), Aussie (hovering close to key support of 0.75), Kiwi (trading close to psychological support of 0.70) and treasuries (short end could gain grounds on stronger report).