The U.S. Nonfarm Payrolls and Unemployment Rate are out this Friday, September 7th, 2018, at 13:30 UK Time, and are expected to cause significant volatility in the markets.

An economic indicator that tends to trigger sharp market movements in the minutes leading up to its release and afterwards, the NFP is usually released by the U.S. Department of Labor on the first Friday of each month, outlining changes in the number of employees, excluding farm workers and those employed by the government, non-profit organisations and private households.

What to expect this month:

Market consensus for this week’s August Nonfarm Payrolls is forecast to show that the U.S. economy added 191K jobs – a noticeably higher number than last month’s results, when job growth missed expectations, coming in at 157K.

The Labour market in the U.S. remains strong, but analysts expect that the economy could lose growth momentum amid the threats of potential trade wars.

Thus, another one weak job growth report could spark volatility on markets.

The markets will also be closely watching the average hourly earnings figure, which came in at 2.7% YoY in July, with many forecasts calling for August’s release to come a bit higher at 2.8% YoY.

Data released inline with expectation will underscore that the U.S. economy is maintaining its growth momentum.

If we see a significantly bad NFP release of 250K, with the Unemployment Rate below 3.9%, will likely result in the USD strengthening.

As always, it will be important to note any revision from the previous month (157K) as this will impact market sentiment regardless of the current release.