Non-Farm Payrolls (NFP): The Payroll Data That Drive Market Movements Have Arrived!

The delayed January Non-Farm Payrolls (NFP) report was released, showing job gains of 130,000 in the U.S., well above the 70,000 forecast and well above the 48k jobs added in December.

The U.S. unemployment rate unexpectedly fell to 4.3% from 4.4%. Expectations had been for a rise to 4.5%. Wage growth was stronger than forecasts on a monthly basis at 0.4% MoM and a yearly basis at 3.7%.

This is a strong jobs report across job creation, unemployment and wage growth. As a result, the market is pushing out its expectations for the next Federal Reserve rate cut.  The markets are now fully pricing in a rate cut for July compared to June previously.

The market reaction to the better-than-expected report sees Treasury yields rising, the USD rising, and stock futures pushing higher.

DOLLAR INDEX (DXY):

Following the release of the NFP results, the Dollar Index has jumped higher, reversing earlier losses. The USD traded -0.1% prior to the release and trades 0.2% at 96.75 following the data. On the 4-hour chart the price  spiked higher but failed at the 50 SMA, reinforcing the downtrend.

EURO VS DOLLAR (EUR/USD):

If we take a closer look at the technicals, we can observe how EUR/USD was trading at 1.19 before the data release, and post the release we have seen price action fall to the 1.1870 region.The price found support on the 50 SMA. Sellers would need to take out this support and 1.1770 for a more bearish outlook.

S&P 500 (SDX):

The S&P 500 has risen after the NFP data result release, as we saw price trading at just above 6955 before the announcement, and currently we are trading just above 6980 at the day’s high. The price trades above its 50 and 200 SMA with a bullish bias, but remains below  the 7000 record high.

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