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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Non-farm payrolls preview – job growth to remain strong

US jobs growth in March is expected to remain solid, although below the level of February, which will encourage the Fed to stick with its plans to tighten monetary policy.

US jobs growth to slow

This month we are expecting to see non-farm payrolls (NFP) rise by 485,000, a strong number, but down on last month’s 678,000. The unemployment rate is expected to fall to 3.7% from 38%, while average hourly earnings are forecast to grow by 0.4%, compared to last month’s flat figure.

Economic growth in question as inflation rises

The current pace of job growth, and indeed of job increases, may well come under pressure as the Federal Reserve (Fed) continues to push forward with interest rate increases.

Indeed, the Federal Open Market Committee (FOMC) may well accelerate the pace of its tightening as the year goes on, with a 50 basis points (bp) increase in rates now a distinct possibility at the meeting in May.

It would take a very sharp downturn in jobs growth for the Fed to reconsider their views, and even then they may have no option but to push forward, given the strong readings in inflation data that currently prevail. For the moment, strong NFP readings such as those we have seen in recent months and are expected for March are likely to reconfirm the Fed in their view that the economy can maintain interest rate increases.

US dollar index outlook

The steady gains in the dollar index over the past year have stalled this month, with the price holding below 99.50. Dips towards 97.60 have found buyers in the short term, which leaves the uptrend broadly intact.

A move below 97 would put the price below the January and February highs, and signal that the retracement has further to run, potentially bringing the 95.85 area into view.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It 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. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Be ready to act on the next non-farm payrolls report

Explore the influence the non-farm payrolls report has on American markets ahead of the next release on 2 July 2021.

  • Which markets could be more volatile after the NFP report?

  • Why was the report introduced and what does it tell us?

  • Why is the report important for traders?

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