EUR/USD - What you need to know about the US NFP - 09/03/2015 (GMT)

Once again, traders will be highly focused towards the upcoming US NFP data which is due on Friday. The forecast for the Non farm employment print is for 220K, but it is all about peeling the layers and the data which is going to grab the most attention will be the average hourly earning and labour productivity numbers. The forecast for these two numbers are 0.2% and 0.1% respectively.

The two most significant mandates on which the Fed is focused on are; the labour market and the inflation rate. We all know that the inflation rate was not going to hit their desired level in September, even if we subtract the most recent uncertainty or market turmoil, which we are facing due to the weakness in the Chinese growth.

However, this new qualm has certainly changed the prospects of the US raising the interest rate, especially in September. The below chart shows the rate hike probability which has dropped all the way from 50% back in July to 38% in September. The probability of the US hiking the borrowing rate during the month of October has gone to 49.2% and for December it is 66%.