How does non-farm payroll affect stocks?

The non-farm payroll data included in the jobs report typically has the most market impact. However, if increases in non-farm payroll occur at a fast rate, this may lead to an increase in inflation and that may be viewed as a negative for the economy.

How does the yield curve affect the economy?

The yield curve has a great impact on the money supply within the economy. Another way to put it is that the yield curve influences the ability of individuals and businesses to obtain traditional bank loans. Banks borrow money at short-term rates, either from the Federal Reserve Discount Window or from its depositors.

What does non-farm payroll tell us?

Nonfarm payrolls is the measure of the number of workers in the U.S. excluding farm workers and workers in a handful of other job classifications. This is measured by the Bureau of Labor Statistics (BLS), which surveys private and government entities throughout the U.S. about their payrolls.

How does the NFP affect currencies?

As an indicator of American employment, NFP affects major currency pairs in the leading currency markets. So, the currency pairs it affects are the EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD and other currencies traded against the US dollar. So, traders need to be well-informed about this market expectation.

How does non-farm payroll affect gold?

The price of gold tends to fall on the day when the Nonfarm Payroll Report comes out. In case of bad news from the labor market, the situation is reversed. Therefore, strong (weak) jobs reports confirm that the U.S. economy is in a good (bad) shape, which is bearish (bullish) for the price of gold.

Why the yield curve is an important economic indicator?

As the economic cycle matures, eventually short-term rates are high due to Fed rate hikes, while longer-term rates begin to rise more slowly or even decline. Thus, the shape of the yield curve can give us hints as to how far along the cycle may be.

What is yield curve What are the advantages of yield curve?

A yield curve is a way to measure bond investors’ feelings about risk, and can have a tremendous impact on the returns you receive on your investments. And if you understand how it works and how to interpret it, a yield curve can even be used to help gauge the direction of the economy.

What causes the yield curve to go up?

The yield curve typically slopes upward because investors want to be compensated with higher yields for assuming the added risk of investing in longer-term bonds. Keep in mind that rising bond yields reflect falling prices and vice versa.

Why is the yield curve flattening?

Money managers and economists often view a shrinking of the gap between yields on shorter-term Treasuries and those maturing out years – known as yield curve flattening – as a sign of worries over economic growth and uncertainty about monetary policy.

Why are payrolls non-farm?

Non-farm payrolls are a monthly statistic representing how many people are employed in the US, in manufacturing, construction and goods companies. NFP gets its name from the jobs that aren’t included: farm workers, and those employed in private households or non-profit organisations. …