US traders come back to their desks today following the public holiday for Independence Day, and are greeted by the pivotal US jobs release.
What are US Non-Farm Payrolls?
The US Department of Labor releases a monthly employment report for goods, construction and manufacturing. It is usually release on the first Friday of the month; though this can differ (it is officially the third Friday after the end of the reference week).
Each month analysts attempt to predict the figure, some with more accuracy than others. The figure usually creates considerable volatility as traders react to the data point, with any revisions to previous months potentially countering the initial move.
Today the median expectation is +165,000 jobs created, slightly below last month +175K. Last month the unemployment rate fell to 7.5% matching the lowest level since 2008.
Traders are attempting to second guess when Ben Bernanke will begin to taper the quantitative easing programme. The loose monetary policy since the credit crunch has seen the price of precious metals rise to record highs. (Gold is seen as a hedge against inflation which is a by-product of QE) The realisation that the Fed will turn off the taps of cheap money has seen a rapid and sustained fall in Gold and Silver.
Bernanke has signalled that economic improvement and better employment figures would be the catalyst for the end of QE.
If the NFP figure is +190K and above would be a bullish print, with anything below +135K being seen as a disappoint print for traders.