Event Overview

⚡ Impact Level High
📈 Markets Affected 4
🎯 Trading Strategies 3
🏦 Recommended Brokers 3
Non-Farm Payrolls (NFP) is released on the first Friday of each month by the Bureau of Labor Statistics. It measures the change in the number of employed people in the US, excluding farm workers.

Why NFP Matters

NFP is crucial because it:

  • Reflects the health of the US economy
  • Influences Federal Reserve policy decisions
  • Moves markets immediately and significantly
  • Sets the tone for the trading month

    • What's Included in NFP

    The NFP report contains: 1. Headline Number: Net jobs added/lost 2. Unemployment Rate: Percentage unemployed 3. Average Hourly Earnings: Wage inflation data 4. Labor Force Participation: Workforce engagement 5. Previous Month Revisions: Updated figures

    Market Expectations

    Traders focus on:

  • Consensus: Average analyst forecast
  • Whisper Number: Trading floor expectations
  • Previous Month: For comparison
  • Revisions: To previous reports

    • Typical Market Reactions

    #

    Stronger Than Expected:

  • USD strengthens
  • Gold weakens
  • Stocks mixed (depends on Fed policy outlook)
  • Bond yields rise

    • #

    Weaker Than Expected:

  • USD weakens
  • Gold strengthens
  • Stocks mixed (bad news can be good if it delays rate hikes)
  • Bond yields fall

    • NFP Trading Reality

    The first 15-30 minutes after NFP are extremely volatile:

  • Spreads widen significantly
  • Whipsaws are common
  • Initial direction often reverses
  • Professional traders wait for dust to settle

    • Best Practices

    1. Know the consensus before the release 2. Reduce position sizes on NFP day 3. Wait 30+ minutes before trading the reaction 4. Watch the USD index (DXY) for direction 5. Consider the Fed policy context

    Historical Impact

    Average move of 50-100+ pips on EUR/USD in the hour following release

    Affected Instruments

    EUR/USDUSD/JPYGoldS&P 500US Treasury Yields

    Trading Strategies

    Wait and React

    Medium Risk

    Wait 30 minutes after release for volatility to settle, then trade the established trend.

    Timeframe: 30 minutes to hours after release
    Instruments:
    EUR/USDUSD/JPYGold

    Straddle Strategy

    High Risk

    Place pending orders above and below current price before release to catch the breakout.

    Timeframe: Immediately after release
    Instruments:
    EUR/USDGBP/USD

    Correlation Play

    Medium Risk

    Trade gold inverse to USD based on NFP result interpretation.

    Timeframe: Post-release
    Instruments:
    XAU/USDDXY

    Key Dates to Watch

    First Friday monthly NFP Release at 8:30 AM ET High
    Wednesday before ADP Private Payrolls (early indicator) Medium
    Thursday before Weekly Jobless Claims Low

    Risk Factors

    ⚠️ Extreme volatility in first 30 minutes
    ⚠️ Spread widening makes entry/exit difficult
    ⚠️ Whipsaws can trigger stops on both sides
    ⚠️ Initial reaction often reverses
    ⚠️ ADP report not always predictive of NFP