How Could Key Assets React To NFP Data?

The US Bureau of Labour Statistics will release the awaited Nonfarm Payrolls (NFP) report for July on Friday. The jobless rate remains at 3.6%, indicating that the labor market remains extremely tight.

Nonfarm Payrolls are expected to have increased by 200,000 in July, down from the 209,000 jobs that were reported in June. The average hourly wage is anticipated to increase at a pace of 4.2% annually, while the unemployment rate is anticipated to stay at 3.6%. These data will bring to a close a week of employment statistics that have so far only slightly softened. The NFP report will be keenly followed and is anticipated to cause market volatility.


The NFP report’s strength or weakness will significantly shape the near-term trajectory of the U.S. dollar, gold, and the S&P 500. The Fed’s commitment to a data-dependent approach in assessing future decisions and the broader normalization outlook has reduced the likelihood of further policy firming in 2023.

However, any change in economic conditions could lead to a reassessment of the ongoing tightening cycle. If job and earnings growth are stronger than anticipated, interest rate expectations could shift in a more hawkish direction, potentially impacting the US dollar but bearish for gold and the S&P 500.

An NFP figure above 300,000 could make this scenario more likely. In the event of weak employment gains, the opposite scenario is likely. A soft NFP report could raise concerns about the economy, weighing on yields and prompting a dovish repricing of the Fed’s tightening campaign. This could result in the US dollar retreating, while the S&P 500 and gold prices could see solid gains.