3 Things to Remember When Trading the September NFP

Thanks to the recent U.S. government shutdown, the September non-farm payrolls release has been delayed for more than three weeks! The Bureau of Labor and Statistics is now ready to release the latest U.S. jobs report at 1:30 pm GMT tomorrow, and the economy is expected to have added 179,000 jobs last month. What else should we expect from this event?

1. USD reaction could last the entire week.

The NFP is typically released on a Friday, which means that the reaction of the U.S. dollar is usually limited to the remaining trading hours of the New York session before traders book profits at the end of the week. This time around, the September NFP figure will be released on a Tuesday so traders have enough time to keep pushing the dollar in a general direction for the rest of the trading week.

2. FOMC decision is scheduled next week.

The U.S. central bank is set to make its monetary policy announcement for October next week, which means that traders will be looking closely at the NFP to figure out whether a taper is still likely or not. Although most traders seemed to have priced in the likelihood that a taper won’t take place within the year, a bleak jobs report might be enough to convince everyone and his momma that an “Octaper” ain’t happening at all.

3. Dollar has been reacting to risk sentiment lately.

With the Fed’s taper issue still a dominant market theme, there’s a chance that the dollar could react to fundamentals during the NFP release. In other words, a strong figure could boost the Greenback while a weak reading might result in a selloff. However, the surge in risk appetite after the U.S. government avoided a default turned out to be bearish for the safe-haven U.S. dollar. Should the dollar keep reacting to sentiment, an upbeat jobs report might still spur dollar-selling!

The bottom line is that this particular non-farm payrolls release could be a pretty tricky one, as it follows a series of unprecedented events in the market. And, as we all know, anything can happen in the forex market so y’all better stay on your toes!