Out of my 3 margin calls, one was due to the US NFP. There is just no sure fire way to ascertain the direction it takes after release.
Overtime, i finally realized that the best answer is, it depends. On the current economic climate, sentiment of the market and more.
Using the 7 May 2021 example as a case study:
The US Non-Farm Payroll came out much worse than expected. It reported 266K new jobs instead of the expected 990K, missing the target by more than 50%.
If you are clueless as to why did the US Dollar dropped while the S&P 500 climbed, allow me to explain.
Due to the terrible week of disappointing economic data for the US, many investors and analysts are of the opinion that the US Federal Reserve will have no choice but to hold on to accommodative policies. This usually produces two effects.
- The US Dollar weakens due to the apprehension towards excess liquidity and supply.
- Equities market climb in anticipation of cheaper money.
Interesting isn’t it? Every US NFP is unique and complex.
This is why I usually do not trade during US NFP.