First Non-Farm Friday of 2013

The Non-Farm unemployment change calculates how many jobs were added to the employment scene in the United states, excluding farmers.

Thursday, the ADP Non-Farm figure was exceptional at 215K, over 80K more the forecasted 134K.

“During the final month of 2012, U.S. private sector employment ended the year on a positive note as 215,000 jobs were added – the ADP National Employment Report’s largest monthly gain since February 2012. During the past year, the private sector added a total of more than 1.7 million jobs.”

– Carlos A. Rodriguez, president and chief executive officer of ADP

ADP_Non-FarmNon Farm Possibilities

What happens 8:30am EST Friday morning has the potential to set the tone for the U.S. Dollar in the month of January. Here are two possible reactions for tomorrow’s official Non-Farm report.

Bullish Dollar

Expectations for a great report are high. The ADP was at it’s best since February 2012 and could have played a critical rule in Thursday’s U.S. Dollar strength. If the official Non-Farm report shows figures as large as 200K or higher, it’s very possible that the Dollar’s strength will continue to build momentum. Since the the fiscal cliff was averted (in theory) it seems sentiment has improved for the Dollar. A positive Non-farms could really put some gas in the tank for Dollar Bulls.

Bearish Dollar

On the other hand, today’s expectations could fall short tomorrow morning. If the official release is in the 150K territory, close to the forecast, the U.S. Dollar could become weak. If today’s ADP Non- Farm was partly responsible for some incredible Dollar strength, tomorrow’s official Non-Farm could be responsible for exponential U.S. Dollar weakness if the high expectations are not achieved.

Friday’s Full of News

The Non-Farm is not the only powerful news release on Friday. As a matter of fact, there are 7 news events being released just at 8:30am. Other U.S. Dollar news includes the unemployment rate which is expected to stay at 7.7%. If a rate below 7.7% is announced along with bullish U.S. Non-Farm news, the U.S. Dollar ought to be very strong on this first Friday of the month.

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  • Johanna, many times that inverse relationship does take place. I think it could be more prevalent with risk aversion when there is bad Dollar news instead of good.

  • Thanks for your comment Yuri!

  • I was under the impression that when these releases are very good the market goes up and thus the Dollar would have to fall on this news.

  • Yuri al Wet

    Interesting slant on NFP. You need 180K new jobs monthly just to tread water.Also the unemployment numbers don’t give you a clear picture of the US’ total unemployment. The real impact of NFP isn’t felt until Asia’s reaction on Sunday/Monday.