*Please note; The author is working from UTC +13 when determining the timeline of data releases.
Will the Non-Farm Payrolls (NFP) move the market this week? Or, has its importance been shifted to the side in the mind of investors and traders, especially as huge new global events draw the world's attention? Of course, I am speaking of the Russian invasion of Ukraine that began at the end of last week and has caused an extreme amount of volatility in the forex, commodity, and stock markets. With no diplomatic resolution in sight, the Russian/Ukrainian war is expected to continue to have an outsized impact on these markets.
Nevertheless, the US Federal Reserve will be watching the NFP figures with interest as they always do and folding the results into its justification to hike interest rates moving forward. As such, investors and traders should be keeping a cursory eye on the values, alongside developments in Ukraine.
The Federal Reserve is almost guaranteed to hike interest rates in its March meeting, its first in the post-pandemic inflationary environment. What isn't guaranteed is how much the Fed will hike. On the table are 25 basis points and 50 basis points. The NFP may impact the Fed's choice between these two options.
ADP Employment Change FEB
Leading up to the big NFP data release, we will have the precursor ADP Employment Change report for February to digest.
Last month’s data surprised the market when it reported a cut of 300K jobs in the private sector (vs an expected gain of 200K jobs). This month’s report may rebound with an expected 350K jobs added to the private sector
Non-Farm Payrolls FEB
Contrary to the ADP Employment Change report, the NFP reported a gain of 470K jobs in January.
The NFP For February is expected to report a 450K job gain. Combining an extraordinary Non-Farm Payrolls beat with other data points regarding the US economy recently might be the impetus the Federal Reserve needs to consider a 50-basis point hike seriously. Alarmingly, US producer prices rose 1% over January, the largest rise over the past twelve months, and lifted US PPI to 9.7% YoY