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Benefits of Portfolio Diversification

Nonfarm Payrolls | Will high expectations see low results

The Nonfarm Payrolls are possibly the economic news release that often sees the highest volatility outside of a Central Bank Interest Rate Decision. 

This volatility is because of the strong correlation between Monetary Policy, Interest Rates and the US Jobs Market. 

The US Bureau of Labor releases the report with the number of new jobs created during the previous month, excluding agricultural businesses. 

Last months Nonfarm Payrolls 

Analysts expected the creation of around 647,000 new jobs. The consensus was short, and the actual number was 916,000. This figure resulted in a giant pin bar on the EURUSD 15 minute chart. Open and Close were in the 1.1767/68 region. The high was 1.1785; the low was 1.1756.

This volatility reiterates the importance of not over-leveraging and trading safe. 

Global job creation took a hit in 2020 due to the pandemic, but as the economy starts to open back up, figures look to be recovering back to normal levels. 

This time around, analysts are forecasting 980,000 new jobs. With this forecast being higher than lasts month actual figure, will they be correct?

Nonfarm Payrolls always carry the potential for colossal volatility spikes and should be considered a hazardous time to trade.

Are you a news trader?

Or maybe a breakout trader?

If you plan to trade The Nonfarm PayrollsTweet us how you plan to tackle the volatility storm should it surface!

 

Brought to you by Darwinex: UK FCA Regulated Broker, Asset Manager & Trader Exchange where Traders can legally attract Investor Capital and charge Performance Fees.

 

Risk disclosure:

https://www.darwinex.com/legal/risk-disclaimer

Content Disclaimer: The contents of this post (and all other posts’) are for educational purposes only and should not be construed as financial and/or investment advice.

Benefits of Portfolio Diversification

BoE Interest Rate Decision | MPC Vote Unchanged, Cut or Hike?

It’s time to prepare for the upcoming BoE Interest Rate Decision. Similarly to The FED, The BoE has attempted to raise rates but has had to succumb to economic factors and reduce them again.

As with all Central Bank Interest Rate Decisions, there is always a risk of massive volatility spikes.

In July 2016, the consensus was expecting a drop from 0.5% to 0.25%. Previously the rates had been a steady 0.5% for over seven years. The consensus was wrong, but The BoC did drop the rate at the next meeting the following month.

They remained there until November 2017, when they increased back up to 0.5%. By August 2018, they were at 0.75%, the highest they’d been since February 2009. Analysts expected that The BoE would drop the rate down to 0.0% in December 2018, but they held firm.

Then a pandemic hit, the economy went into meltdown and central banks needed to intervene. In March 2020, The BoE dropped the Interest Rate to 0.25%. Analysts have had a hard time forecasting what The BoE will do.

The expectation at the time was for 0.0%, but again The BoE didn’t oblige.
With Rates at 0.1%, the BoE has room to go lower, but the consensus suggests they won’t drop further, but they’ve been wrong before.

Interest Rate Decisions always carry the potential for colossal volatility spikes and should be considered a hazardous time to trade.

Are you a news trader?

Or maybe a breakout trader?

If you plan to trade The BoE Interest Rate Decision, Tweet us how you plan to tackle the volatility storm should it surface!

Brought to you by Darwinex: UK FCA Regulated Broker, Asset Manager & Trader Exchange where Traders can legally attract Investor Capital and charge Performance Fees.

Risk disclosure:

https://www.darwinex.com/legal/risk-disclaimer

Content Disclaimer: The contents of this post (and all other posts’) are for educational purposes only, and are not to be construed as financial and/or investment advice.