Spread Betting Tips: Will the US Unemployment Rate Remain at 8.2%?

LONDON, August 3, 2012 /PRNewswire/ --

The much-awaited non-farm payrolls and unemployment data will be released in the US later today, with the headline jobless rate expected to remain stubbornly above 8% for the last month.

With this in mind, how could you take a spread betting position on the Wall Street index ahead of the significant non-farm payroll announcement?

Below, we look at the market expectations for the US unemployment rate and offer our spread betting tips on how to take a position on the Wall Street index following the announcement.

Market Expectations

Investors are already bracing themselves for some added volatility as today's data emerges, which follows close on the heels of the US Fed announcement that the economy 'decelerated somewhat' in the first half of the year.

Today's report is expected to show the unemployment rate remaining unchanged at 8.2% in July, with non-farm payrolls rising by 100,000 last month, following a rise of 80,000 in June.

US unemployment expected to remain unchanged at 8.2%

Investors will keenly be watching today's payroll figures, which are widely used as a barometer of the health of the US economy.

If today's non farm payrolls come in below the expected 100,000, it would mark the fourth consecutive monthly reading of below the 100k-mark and could have a negative impact on investor sentiment. Unexpectedly poor non-farm payroll figures have previously sparked a knee jerk bearish reaction amongst investors and so traders will need to keep their eye out for a disappointment this time around.

Alternatively, however, if today's non-farm figures come in above market expectations, it could reinforce optimism and push prices higher. However there is a catch 22 situation with today's jobs data. Weaker data could help to reinforce optimism that the Fed could inject more stimulus in the form of QE and this could potentially limit negative sentiment from a disappointment.

Which way will you trade Wall Street Index?

With financial spread betting, you can take a position on the markets irrespective of whether you expect prices to rise or fall following today's non-farm payroll announcement.

All you need to do is determine whether you expect prices to rise or fall following the announcement and take a position accordingly. For instance, if you believe that prices will rise following the announcement, you would go long and buy the Wall Street index, and if you expect prices to fall after the announcement, you would go short.

You would make a profit so long as markets move in the direction you had anticipated; ie if you expect Wall Street to rise and it does, or if you expect it to fall and it does, you would make a profit. If, however, you expect Wall Street to rise and it falls instead, i.e. prices move against your position, you would make a loss.

Spread betting is a leveraged product which can result in losses greater than your initial deposit. Ensure you fully understand the risks.

Summary

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The company pioneered fully interactive online spread betting in 1999 and continues to invest in technology to ensure that its service remains amongst the market leaders.