• Home
  • Pro
  • Partners
  • Help and support
  • English
  • 中文版
Pepperstone logo
Pepperstone logo
  • Ways to trade
    • Trading accounts

      Choose from two account types depending on your strategy

    • Premium clients

      Exclusive rewards and bespoke benefits for high-vol traders

    • Pricing

      Discover our tight spreads, plus all other possble fees

    • Pro
    • Active trader program
    • Refer a friend
    • Trading hours
    • 24-hour trading
    • Maintenance schedule
    • Risk management
    • Funding and withdrawals
  • Markets
    • Margin FX

      Get great rates on majors like EUR/USD, plus minors and exotics

    • Commodity CFDs

      Trade on metals, energies & softs, with oil spreads from 2 cents

    • Cryptocurrency CFDs

      Speculate on Bitcoin, Ether and more, with a trusted broker

    • Share CFDs
    • Index CFDs
    • ETF CFDs
    • Currency Index CFDs
    • Dividends for index CFDs
    • Dividends for share CFDs
    • CFD forwards
  • Trading platforms
    • TradingView

      Trade through the world-famous supercharts with great pricing

    • MetaTrader 5

      Explore the apex in trading automation with our execution tech

    • The Pepperstone platform
    • MetaTrader 4
    • cTrader
    • Trading tools
  • Market analysis
    • Navigating markets

      Latest news and analysis from our experts

    • The Daily Fix

      Your regular round-up of key events

    • Meet the analysts

      Our global team giving your trading the edge

  • About us
    • Who we are

      Pepperstone was born from the dream of making trading better

    • Company news
    • Company awards
    • Protecting clients online
    • Trading accounts

      Choose from two account types depending on your strategy

    • Premium clients

      Exclusive rewards and bespoke benefits for high-vol traders

    • Pricing

      Discover our tight spreads, plus all other possble fees

    • Pro
    • Active trader program
    • Refer a friend
    • Trading hours
    • 24-hour trading
    • Maintenance schedule
    • Risk management
    • Funding and withdrawals
    • Margin FX

      Get great rates on majors like EUR/USD, plus minors and exotics

    • Commodity CFDs

      Trade on metals, energies & softs, with oil spreads from 2 cents

    • Cryptocurrency CFDs

      Speculate on Bitcoin, Ether and more, with a trusted broker

    • Share CFDs
    • Index CFDs
    • ETF CFDs
    • Currency Index CFDs
    • Dividends for index CFDs
    • Dividends for share CFDs
    • CFD forwards
    • TradingView

      Trade through the world-famous supercharts with great pricing

    • MetaTrader 5

      Explore the apex in trading automation with our execution tech

    • The Pepperstone platform
    • MetaTrader 4
    • cTrader
    • Trading tools
    • Navigating markets

      Latest news and analysis from our experts

    • The Daily Fix

      Your regular round-up of key events

    • Meet the analysts

      Our global team giving your trading the edge

    • Who we are

      Pepperstone was born from the dream of making trading better

    • Company news
    • Company awards
    • Protecting clients online
USD

US nonfarm payrolls preview - markets even more sensitive to the outcome

Chris Weston
Chris Weston
Head of Research
7 Mar 2023
Share
It’s been a huge day for the USD and the trading world is on full lookout for Friday's US nonfarm payrolls (NFP).

After Jay Powell’s speech to the Senate, the market will be incredibly sensitive to the outcome of the NFP report and especially if we see a more extreme number relative to expectations of 215k – so an outcome number north of 300k or below 150k. The market is feeling, on balance, that the risks are for a strong number than a weaker one.

Preview

Average Hourly Earnings (AHE) matter, of course, and the market reaction becomes more problematic to gauge if we get a hot jobs print but a weaker AHE (the consensus is 0.3%) – unless we see AHE at or below 0.2%, I will still guess that an NFP print above 300k would see rate hike expectations rise further and the USD rally.

Jay Powell has essentially opened the door to 50bp at the 22 March FOMC meeting – he explicitly said if the data required it – meaning the NFP and US CPI print – that they would step up to 50bp again. He has given the Fed optionality, but one suspects he would be loath to do so as it is not a good look to change tactics when you’ve only just moved down to 25bp increments.

Rates pricing – we see market pricing and expectations of action for each FOMC meeting.

Preview

After Powell’s testimony to the Senate, we see that the rates market prices 40bp of hikes for 22 March - this equates to roughly a 60% chance of a 50bp hike at that meeting – in turn, the US2yr Treasury has pushed above 5% and US real rates have blown up – this is nirvana for the USD, and the buck hasn’t looked back here, and we see price firmly breaking out (in the DXY).

Preview

The USD bulls will point to increasing signs of central bank policy divergence creeping into FX markets, where the Fed are back to being the hawks of the central bank world – and while the ECB is expected to do more by year-end, the market prices a peak fed funds of 5.62% and that is far in excess of ECB pricing.

An AUDUSD liquidation - The prospect that the RBA are to follow the BoC and pause in its hiking cycle has clearly increased – many are talking about the Aus Q1 CPI print (released on 26 April) as the key determinant for that action. However, given the Q1 CPI print falls after the 4 April RBA meeting there is a real possibility that we get another rate hike in April, but whether that is a full 25bp is yet to be seen.

We get the Aussie Feb jobs report (16 March) and Feb monthly CPI (29 March) and that could affect rate expectations for the April meeting, but I think the Q1 CPI print is key for policy. The market prices 15bp of hikes for the 4 April meeting and 45bp in total.

The fact we are closer to an end for the RBA does suggest reduced buying support for AUDUSD should we see a blow-out US NFP this week – of course, the Fed want to hike by ‘just’ 25bp but putting 50bp on the table helps tighten financial conditions, but it would be a bitter blow to have to backtrack after only just coming down to 25bp increments – a weak NPF would validate that hope/position, but it would see the market paring back interest rate expectations and the USD would fall sharply.

Volatility is the name of the game and NFP holds the keys – we are seeing it in bond and interest rate markets. We’re just waiting for it to fully spill over in FX and equity too.


Related articles

A traders’ week ahead playbook – Powell and US payrolls could set the market alight

A traders’ week ahead playbook – Powell and US payrolls could set the market alight

FOMC
US
FX trader - It's EURs time to shine

FX trader - It's EURs time to shine

EUR

The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.

Other sites

  • The Trade Off
  • Partners
  • Group
  • Careers

Ways to trade

  • Pricing
  • Trading accounts
  • Pro
  • Premium Clients
  • Active Trader program
  • Refer a friend
  • Trading hours

Platforms

  • Trading Platforms
  • Trading tools

Markets & Symbols

  • Forex
  • Shares
  • ETFs
  • Indices
  • Commodities
  • Currency indices
  • Cryptocurrencies
  • CFD Forwards

Analysis

  • Navigating Markets
  • The Daily Fix
  • Meet the analysts

Learn to Trade

  • Trading Guides
  • Videos
  • Webinars
Pepperstone logo
support@pepperstone.com
1300 033 375
Level 16, Tower One, 727 Colins Street
Melbourne, VIC Australia 3008
  • Legal documents
  • Privacy policy
  • Website terms and conditions
  • Cookie policy
  • Whistleblower Policy
  • Sitemap

© 2025 Pepperstone Group Limited

Risk Warning: Trading CFDs and margin FX is risky. It isn't suitable for everyone and if you are a professional client, you could lose substantially more than your initial investment. You don't own or have rights in the underlying assets. Past performance is no indication of future performance and tax laws are subject to change. The information on this website is general in nature and doesn't take into account your personal objectives, financial circumstances, or needs. You should consider whether you’re part of our target market by reviewing our TMD, and read our PDS and other legal documents to ensure you fully understand the risks before you make any trading decisions. We encourage you to seek independent advice if necessary.

Pepperstone Group Limited is located at Level 16, Tower One, 727 Collins Street, Melbourne, VIC 3008, Australia and is licensed and regulated by the Australian Securities and Investments Commission.

The information on this site and the products and services offered are not intended for distribution to any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

© 2024 Pepperstone Group Limited | ACN 147 055 703 | AFSL No.414530