NFP Preview: How Jobs Could Still Drive Volatility Despite Iran Focus
Author: Matt Weller CFA, CMT, Head of Market Research
Date: April 3, 2026
Key Points
- NFP report expectations: +59K jobs, +0.3% m/m earnings, unemployment at 4.3%.
- Leading indicators suggest potential job growth of 100-130K.
- USD/JPY testing 6-week highs; potential for gains if jobs report exceeds expectations.
- February NFP report release: March 6, at 8:30 ET.
NFP Report Expectations
Traders and economists are anticipating the upcoming Non-Farm Payrolls (NFP) report to show the creation of 59,000 net new jobs, with average hourly earnings expected to rise by 0.3% month-over-month (3.7% year-over-year), and the unemployment rate to remain at 4.3%. This report is crucial as it reflects the health of the labor market in the world's largest economy.
NFP Overview
Despite the ongoing developments in the Middle East, the NFP report remains a significant focus for traders. The previous month saw a stronger-than-expected job growth of 130,000, with the unemployment rate dropping to 4.3% and average hourly earnings increasing by 0.4% m/m. However, expectations for February are more subdued, indicating a potential return to a "low hire, low fire" environment.
NFP Forecast
Four leading indicators are being monitored to gauge the NFP report's outcome:
- ISM Services Employment subindex increased to 51.8.
- ISM Manufacturing Employment subindex remained steady at 48.8.
- ADP Employment report showed an increase of 63,000 jobs.
- 4-week moving average of initial unemployment claims rose to 220,000.
These indicators suggest a potential job growth reading in the range of 100,000 to 130,000, although the inherent unpredictability of the NFP report should be noted.
Potential NFP Market Reaction
The market's reaction to the NFP report will depend on the combination of job growth and wage increases:
| Wages | Jobs < 20K | Jobs 20-120K | Jobs > 120K |
|---|---|---|---|
| < 0.2% m/m | Bearish USD | Slightly Bearish USD | Neutral USD |
| 0.2-0.4% m/m | Slightly Bearish USD | Neutral USD | Neutral USD |
| > 0.4% m/m | Neutral USD | Slightly Bullish USD | Bullish USD |
Technical Analysis
The USD/JPY currency pair is currently near the top of its 3-month range, having rallied to test a 6-week high. A stronger-than-expected jobs report could push USD/JPY above 158.00, while a weaker report may lead to a pullback below 156.00.
In conclusion, while geopolitical tensions in the Middle East are significant, the upcoming NFP report will likely play a crucial role in determining market volatility and the direction of the US dollar.