Markets await NFP impact

NFP anticipation grips markets as an eventful week concludes

By Ahmed Azzam | @3zzamous | 2 February 2024

Market open
  • Markets await key US Non-Farm Payroll (NFP) report insights

  • Slight increase expected in the unemployment rate

  • The pace of average hourly earnings growth is projected to decelerate

NFP to conclude eventful week

Looking ahead, today's eagerly awaited US Non-Farm Payroll (NFP) report is poised to be the focal point, concluding a week marked by significant market events. Anticipations center around a moderation in headline job growth to 178,000 in January, compared to the robust 216,000 in December. Additionally, a slight increase in the unemployment rate to 3.8% from 3.7% is expected, while the pace of average hourly earnings growth is projected to decelerate to 0.3% month-on-month.

Preliminary indicators, such as the ADP private employment figure, revealing a modest growth of 107,000, and a slight dip in the ISM manufacturing employment component to 47.1, hint at potential softness in headline job growth. Yet, the wildcard remains in wage growth, with the capacity to significantly influence market dynamics.

A key post-NFP development to monitor is the 10-year yield, which witnessed a marked decline throughout the week. The strong downside momentum now amplifies the likelihood of the overarching downward trend from the peak of 4.997 resuming, adding another layer of intrigue to an already eventful week in global financial markets.