Pepperstone logo
Pepperstone logo
  • English
  • عربي
  • Ways to trade

    Pricing

    Trading accounts

    Pro

    Premium clients

    Refer a friend

    Active trader program

    Trading hours

    24-hour trading

    Maintenance schedule

  • Trading platforms

    Trading platforms

    TradingView

    Pepperstone platform

    MetaTrader 5

    MetaTrader 4

    cTrader

    Integrations

    Trading tools

  • Markets

    Markets to trade

    Forex

    Shares

    ETFs

    Indices

    Commodities

    Currency Indices

    Cryptocurrencies

    Dividends for index CFDs

    Dividends for share CFDs

    CFD forwards

  • Market analysis

    Market news

    Navigating Markets

    The Daily Fix

    Meet the analysts

  • Learn to trade

    Trading guides

    CFD trading

    Forex trading

    Commodity trading

    Stock trading

    Crypto trading

    Bitcoin trading

    Technical analysis

    Day trading

    Scalping trading

    Upcoming IPOs

    Gold trading

    Oil trading

    Webinars

  • Professional Clients

  • Partners

  • About us

  • Help and support

  • English
  • عربي
  • Launch webtrader

  • Ways to trade

  • Trading platforms

  • Markets

  • Market analysis

  • Learn to trade

  • Professional Clients

  • Partners

  • About us

  • Help and support

Analysis

US500
Nonfarm Payrolls
Gold

How to Trade a High-Impact US Nonfarm Payrolls Report

Chris Weston
Chris Weston
Head of Research
1 May 2025
Share
The US economy is in a period of transition, with market players attempting to quantify what the end point for the effective tariff rates will look like, and whether the US economy will ultimately muddle through or head ominously towards recession and subsequently modelling what a recession would look like.

This is a frustrating process for markets, as the journey to price either of those factors is obviously not immediate and is a non-linear, drawn-out process, and that doesn’t reconcile well with a market that wants immediate answers and thinks in light-speed.

The result is therefore increased sensitivity to the US economic data flow and company earnings, and we’ve seen that in reaction to earnings from Microsoft and after-market from Apple and Amazon, as we have on the better-than-feared US ISM manufacturing report. The headline ISM manufacturing index coming in at 48.7 vs 47.9, with the new orders sub-component at 47.2 vs 45.0. The outcome was still a deterioration from the prior month, but not as severe as the regional PMI prints had guided to.

Positioning for a High Impact US Nonfarm Payrolls Report

The batten has now been firmly passed to today’s US nonfarm payrolls (NFP), and while the jobs numbers could be seen as somewhat stale - as the lag effect suggests US businesses are more likely to lay off workers from May onwards, the market will likely react strongly to a poor NFP outcome, as the tolerance for poor data is low.

While we did see a rise in the US weekly jobless claims (241k vs 223k last week), we haven’t seen any strong evidence of layoffs in the JOLTS report, or in the Challenger job cuts survey (at 62.7%). That said, should we see a poor NFP print in the session ahead, that will not be taken well by the USD or risk assets (equity & credit), and it would accelerate the view that the US economy is headed for tougher times. Instinctively, if US businesses read about other businesses retrenching the semantics could accelerate further job losses.

As such, a NFP print below 80k, with revisions to the two prior prints, and/or a rise in the U/E rate to 4.3%+ could set off market volatility and would go some way in forcing the Fed’s hand to cut rates at the 18 June FOMC meeting. US swaps currently imply a 7% chance of easing at next week’s FOMC meeting, with a poor NFP print likely pushing the implied pricing towards 30%, with a 25bp cut implied for the June meeting rising towards 90% (currently 62%). While we consider the bear case outcomes for markets, we also consider how markets react to an inline report, as we do the reaction to a hotter NFP print. What is clear and where there is little debate in my mind, is that bad news, despite leading to increased Fed rate cut pricing, is also bad for US equity and the USD, while likely helping stem the selling of gold. Conversely, better data will lift US 2yr Treasury yields, and see the USD and US equity push higher, with the selling in gold accelerating.

Market Reaction to the ISM Manufacturing and Earnings

Preview

The reaction in markets to the US ISM manufacturing has been fairly telling. US 2yr Treasuries sold off on the print, with yields rising from 3.55% to 3.72%, before settling out at 3.69% (+9bp of the day). The USD has found some form, with USDJPY pushing firmly above 145.00 with longs assisted by the dovish BoJ policy meeting. EURUSD settles under 1.1300 with the technical set-up looking heavy and many now looking to react aggressively if the NFP print comes hotter, and on the day, I would expect EURUSD 1-day implied vol to build rapidly as today’s session wears on. USDCHF will also be highly sensitive to moves in the US 2yr and US OIS curve, with an upside break of 0.8312 set to attract increased buying from the momentum accounts. The fact that the CHF swaps curve is now implying that the SNB take rates back into a negative setting, offers reasons to cut back on USDCHF shorts.

Trading Australia - Getting Set for the Election

AUDUSD eyes a push to the low end of its recent consolidation range of 0.6350, although the spot rate also has its eyes on the CNH (Chinese yuan) which has been the epitome of stability, with macro funds largely giving up on tactically positioning for a higher USDCNH – partly as USD longs haven’t really worked, but we’ve also seen the PBoC holding back the CNY/CNH selling flows – a seemingly prudent move, as China look to engage with the US in trade talks, while also disincentivising domestic capital outflows.

Some will consider tomorrow's Australian election and the possibility of gapping risk in the AUS200, ASX200 equity and even the AUD. If the recent polls are indeed on the money – and they were in 2022 – with the betting markets almost at the stage of early payouts (for a Labor win), there seems a low probability of any real move in Aussie assets from the election in isolation. We could feasibly see a small degree of relief in equity on the Monday re-open should the ALP indeed get a majority, as the status quo makes pricing certainty far more efficient. The risk, however, would be if the ALP get less than 68 seats, leading to a prolonged period of forming a government – with increased spending commitments and the prospect of a more dysfunctional govt leading to a small downside risk for ASX200 equity.

Apple and Amazon Lower After-market

US equity has closed higher, with the S&P500 +0.6% taking its run of higher closes to 7 straight sessions, with the NAS100 cash +1.1% and takes its outperformance from a solid move in Microsoft and Nvidia. Again, the theme was to stay long growth and high beta, although this position has been called into question ahead of NFP and after the poor reaction aftermarket to Amazon and Apple’s earnings, with both companies trading lower in response. Apple may have loosely met the sell-side consensus expectations, but one can imagine the buy-side funds were looking for more, with the view that we could have seen higher demand for Apple’s products as wholesalers and customers front-run tariffs, but we saw no evidence of that. Apple in fact, quantified the impact of tariffs, detailing that tariffs are set to add $900m in costs – that’s a lot of iPhones that need to be sold to recoup the difference or more likely prices will be going up 5%+.

We’ll see how Asia reacts today, and while China remains offline for the Labour Day holiday, we’ll see how traders’ position for a potentially highly impactful US NFP print.

Good luck to all.

The material provided here 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. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients.

Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.

Other sites

  • The Trade Off
  • Partners
  • Group
  • Careers

Ways to trade

  • Pricing
  • Trading accounts
  • Pro
  • Premium clients
  • Active trader program
  • Refer a friend
  • Trading hours

Platforms

  • Trading platforms
  • Trading tools

Markets and Symbols

  • Forex
  • Shares
  • ETFs
  • Indicies
  • Commodities
  • Currency indicies
  • Cryptocurrencies
  • CFD forwards

Analysis

  • Navigating Markets
  • The Daily Fix
  • Meet the Analysts

Learn to trade

  • Trading Guides
  • Videos
  • Webinars
Pepperstone logo
support.ae@pepperstone.com
+97145734100
Al Fattan Currency House
Level 15, Office 1502 A, Tower 2
P.O.Box 482087, DIFC
Dubai, United Arab Emirates
  • Legal documents
  • Privacy policy
  • Website terms and conditions
  • Cookie policy
  • Whistleblower policy
  • Sitemap

© 2025 Pepperstone Financial Services (DIFC) Limited

Risk warning: Trading CFDs and FX carries significant risk. Trading OTC derivatives may not be suitable for everyone so please ensure that you fully understand the risks involved and take care to manage your exposure. You have no ownership of the underlying asset. Pepperstone Financial Services (DIFC) Limited does not issue advice, recommendations or opinion in relation to acquiring, holding or disposing of OTC derivatives nor is Pepperstone a financial advisor. All services are provided on an execution only basis. Pepperstone Financial Services (DIFC) Limited only provides information of a general nature and does not take into account your financial objectives, personal circumstances. We recommend that you seek independent personal financial or legal advice.

Pepperstone Financial Services (DIFC) Limited is registered at Al Fattan Currency House, Tower 2, Level 15, Office 1502 A, P. O. Box 482087, DIFC, Dubai, United Arab Emirates and is regulated by the DFSA under license number F004356.

The product issuer is Pepperstone Group Limited registered at Level 16, Tower One, 727 Collins St, Docklands, Victoria 3008, Australia and is licensed and regulated by the Australian Securities and Investments Commission, AFSL 414530. You should consider whether you are part of the product issuer’s target market by reviewing the TMD, and read the PDS and other legal documents to ensure you fully understand the risks before you make any trading decisions.