The non-farm payroll is due out over the course of the next 48 hours, and many will be asking just how much of an impact it will have. The most likely answer is that it will have a massive impact on the markets this time around and more so than before. Markets are likely to rally to either side it falls and we could see some insane volatility
The build of build ups has come and the American labour market has been looking really hungry as of late, which sets the stone for a strong non-farm payroll. We have the ADP non-farm indicator which has beaten expectations with a 230k reading. Something the market has been somewhat positive about.
The ISM Manufacturing PMI has rocketed back up recently, and is starting to show very strong momentum, as it continues its expansion strongly. This has been generally shadowed by the non-manufacturing PMI. However, it recently dropped off and this is some concern. But, it’s still a very strong reading last nights one.
So with non-farm coming up where should your focus shift. Normally I would argue that gold is the ideal contender for large movements. But in this case there are two currency pairs I believe that will benefit the most from a strong USD movement – the GBPUSD and USDJPY.
As you may already know the USD/JPY is looking very, very bullish, and we could see a push into the 117 mark with a strong non-farm payroll and even onwards to the 120 mark, before we see some consolidation or at least impartial slow down.
The final pair the GBPUSD is currently stuck on a floor (very strong support), a strong USD could finally break this and we could see the bears take control and direction of the pound as it moves lower.
Either way this coming non-farm payroll is set to be a big one on the calendar with all the build up and volatility that is currently in the markets. Expect some big movements on the day and pay attention because if you blink you may just miss it all.