Nonfarm-Payrolls expected effect on S&P500 (SPX) and EUR/USD
During the last 10 months the correlation of surprises for ADP Nonfarm employment change and Nonfarm payrolls is positive (58%). This means that if we saw a negative ADP nonfarm employment change on Wednesday, we should see a negative nonfarm payroll today. This is however not certain. In fact, the February ADP came out with a -34% negative surprise while the NFP came out with a +108% positive surprise. The historical correlation of the nonfarm payrolls with the same day SPX return is around 6%. This is a non-significant positive correlation.
On average, the SPX tend to register a positive return independently from the nonfarm payrolls report. For this reason, even if we are seeing a negative NFP figure today, the market is still probably gonna perform well. The average return of SPX on the NFP publication day is +0.48% (+0.80% if we exclude negative historical returns). Therefore, we expect a positive move with an accumulation in the $4450-$4470 area.
Similar to the SPX, the EUR/USD cross tends to react positively to the NFP announcement in the 15/60 minutes period after the NFP announcement. In this respect, we expect a positive increase of around +15/+20 pips in the 15/60 minutes period after the NFP publication.
On average, the SPX tend to register a positive return independently from the nonfarm payrolls report. For this reason, even if we are seeing a negative NFP figure today, the market is still probably gonna perform well. The average return of SPX on the NFP publication day is +0.48% (+0.80% if we exclude negative historical returns). Therefore, we expect a positive move with an accumulation in the $4450-$4470 area.
Similar to the SPX, the EUR/USD cross tends to react positively to the NFP announcement in the 15/60 minutes period after the NFP announcement. In this respect, we expect a positive increase of around +15/+20 pips in the 15/60 minutes period after the NFP publication.
