April showed very little growth in terms of U.S. payroll, according to the most recent release. Gains here were the smallest that have been seen in the last seven months, and nonfarm payroll jobs added went down to 160,000. This is well below the average of 200,000 that had been set per month for the first quarter. Adding to the issue is the fact that both February and March were retroactively adjusted with 19,000 fewer jobs than what was originally indicated. The unemployment rate currently sits at 5.0 percent, which is unchanged thanks to the fact that jobs were lost as well as gained. According to a Reuters poll, the unemployment rate was likely to stay at 5.0 percent, but jobs gained were expected to sit at 202,000. One of these was correct, but the other was much weaker than expected, showing hints of instability within the U.S. economy.
The jobs report is one of the key fundamental indicators that is released each month by the U.S., and it has a profound impact on trading. There’s a strong chance that Friday will see stocks and indices decreasing in value across the board. As a binary options trader, your focus should be on put options here. If there are assets that are showing ambiguity or resistance to the data, it’s probably a good idea to avoid trading them simply because they are acting unpredictably, and your odds of a correct trade are not as good with these. Focusing on where the momentum is will be your strongest trading strategy when something like this occurs, at least until technical signs point to the fact that markets have hit a bottom. By acting early in the day, you can ride the momentum for several hours before that happens, though.
The silver lining to this is that it lowers the odds of the Federal Reserve raising interest rates this year. This is something that has potential to increase the power of the U.S. dollar, and weaken the stock market. So while economic growth is showing signs that it’s slowing down, it also is a fortuitous occurrence for those that like to trade with a long term approach to things, such as position traders and month long binary options traders. There was the possibility of a rate hike coming up in June, but it is now pretty clear that the economy isn’t at the strongpoint that analysts may have believed. Instead, while growth is still occurring in many areas, the balance is a bit more delicate, and in order to protect the economy, a Fed rate hike is very unlikely to occur so that some cushioning can be obtained.
However, while the June hike is now extremely unlikely, the odds of a September hike do come into play. Right now, the data is clear, and needs to be incorporated into your trading. The U.S. dollar has already shown clear signs of dropping in price against the major currencies, including the euro. The major stock indices in the U.S. are also showing early signs of losses, indicating that for the time being, there will be both a weak dollar and a weak stock market. For those looking to take out strategically timed long positions, now is the time to start getting ready. If you are going to be using traditional brokers, it is important that you look for ways to protect yourself and hedge your positions, just in case. Using binary options of various expiries to help offset risk can be very smart here as it helps you to protect your assets while still generating large profit amounts.