February US Non-Farm Payrolls (NFP) Prints at +273k

US Dollar, US NFP Talking Points

• The US Dollar came into the morning holding on to an aggressive bearish trend.
• This morning brought the release of February Non-Farm Payrolls Numbers.
• This morning’s NFP print was released to a tune of +273k v/s the expectation of +175k. The unemployment rate came in at 3.5% v/s the expectation for 3.6%. And Average Hourly Earnings printed in-line with the expectation of 3%.

US Non-Farm Payrolls for February

It was a busy backdrop coming into the morning as a recent round of risk aversion sent global markets spiraling in disarray. While stocks have seen a bit of pressure, it’s been moves in the significantly larger US Treasury market that’s caught so many by surprise.

This flight to quality is being driven by fears around the still-spreading Coronavirus, and investors and traders have started to hone in on data releases in the effort of gauging just how much slowdown may emanate from this fear.

In the US, the risk is still relatively new, so data is of the upmost importance in trying to set those expectations; and Non-Farm Payrolls is especially pertinent given that it’s the fastest look recent econ, particularly on the employment-front.

This morning’s NFP report was a blowout number, printing at +273k vs the expectation of +175k. The unemployment rate edged back down to 3.5% from last month’s 3.6%, and even wage gains remained strong as Average Hourly Earnings printed at 3%. This provided a quick boost to the US Dollar after a really aggressive span of weakness had taken-over the currency.

US Dollar One-Minute Price Chart

USD on Tradingview

The bigger question, however, is of a bigger picture nature and how or even if this might impact the stance around the Federal Reserve. It was just a few days ago when the FOMC announced an emergency rate cut of 50 basis points, the first of its kind.

As discussed in yesterday’s webinar, the US Dollar had quickly moved into an oversold state after just two weeks ago setting a fresh three-year-high. This stunning reversal is driven by the expectation for the FOMC to get even more loose and passive down-the-road, with Coronavirus popping up as a near-term risk.

US Dollar Daily Price Chart

USD on Tradingview

Taking an even further step back, and the reversal backdrop in the US Dollar remains as seen on the weekly chart below.

US Dollar Weekly Price Chart

USD on Tradingview

--- Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX