Non-Farm Payrolls Preview: Employment May "Return to Normal"? Iran Situation Dominates Markets
2026-04-03 14:55:39
The March non-farm payroll report will be released at 8:30 PM Beijing time on Friday (April 3). Traders and economists expect the March non-farm payroll report to show that the U.S. added 60,000 net jobs, average hourly earnings rose 0.3% month-over-month (3.8% year-over-year), and the U3 unemployment rate was 4.4%.
Following President Trump's hawkish prime-time address to the nation on Thursday, markets are pricing in the risk of a protracted conflict with Iran, and more importantly, the potential permanent closure of the Strait of Hormuz. Against this backdrop, the market's primary focus will remain on developments in the Middle East, rather than any economic data—not even top-tier figures like the US non-farm payroll report.
Nevertheless, the market still needs to focus on the US job market, as it remains a driver of monetary and fiscal policy. Last month's non-farm payroll data was far below expectations, showing a loss of 92,000 jobs and a rise in the unemployment rate; however, some analysts believe this may have been due to one-off factors, which could reverse this month.
Regardless, traders expect this month's jobs report to continue the trend of "low hiring, low layoffs" that has been present for the past year or so.
Traders generally expect this non-farm payroll report to "return to normal": moderate job growth, stable unemployment, and continued gradual wage increases .
Meanwhile, with inflation accelerating and surpassing the Fed's 2% target, traders have largely priced in no further rate cuts from the Fed this year . The CME Group's FedWatch tool shows a 0.5% probability of a 25 basis point rate hike in April and a 99.5% probability of keeping rates unchanged. By June, the probability of a cumulative 25 basis point rate cut is 6.0%, the probability of keeping rates unchanged is 93.5%, and the probability of a cumulative 25 basis point rate hike is 0.5%. By December, the probability of a cumulative 25 basis point rate cut is 35.1% (25.1% the previous day), the probability of keeping rates unchanged is 50.2% (73% the previous day), and the probability of a cumulative 25 basis point rate hike is 14.7% (1.9% the previous day).
Clearly, traders are coming to the conclusion that even if Kevin Warsh, Trump's nominee for the next Federal Reserve chairman, takes office, the case for further rate cuts in the short term will be a tough battle .
Pay attention to historically reliable leading indicators to help interpret each non-farm payroll report:
(Non-farm payroll leading indicators chart, source:)
Based on the above data, leading indicators suggest that this month's non-farm payroll data may be higher than expected, with overall job growth likely between 100,000 and 140,000.
Other aspects of this release—including the closely watched average hourly earnings and unemployment rate—will also influence how the market reacts to the data.
On Friday, during the Asian and European sessions, the US dollar index fluctuated narrowly around 100.00. From a technical perspective, driven by continued safe-haven demand, the dollar is currently trading near the top of its ten-month range against major currencies. Unless there is progress in reopening the Strait of Hormuz, any pullback in the dollar is likely to be short-lived.
The US dollar index continues to rise within a bullish channel, approaching a ten-month high near 100.64. This resistance level remains a strong barrier, having suppressed price increases six times since May of last year. The more times this resistance level is tested, the greater the likelihood of a breakout.
If the dollar does indeed confirm a break above the 100.64 resistance level—whether driven by a strong jobs report or the ongoing escalation of tensions in the Middle East—the next level to watch will be the yearly high near 101.00. On the other hand, particularly weak non-farm payroll data, or signs of a potential ceasefire in Iran, could break the current bullish channel, setting the stage for a pullback to 99.00 or 98.00 later this month. However, for now, this scenario seems less likely.
(US Dollar Index Daily Chart, Source: FX678)
At 14:53 Beijing time, the US dollar index is currently at 100.00.
Non-farm payrolls overview
Following President Trump's hawkish prime-time address to the nation on Thursday, markets are pricing in the risk of a protracted conflict with Iran, and more importantly, the potential permanent closure of the Strait of Hormuz. Against this backdrop, the market's primary focus will remain on developments in the Middle East, rather than any economic data—not even top-tier figures like the US non-farm payroll report.
Nevertheless, the market still needs to focus on the US job market, as it remains a driver of monetary and fiscal policy. Last month's non-farm payroll data was far below expectations, showing a loss of 92,000 jobs and a rise in the unemployment rate; however, some analysts believe this may have been due to one-off factors, which could reverse this month.
Regardless, traders expect this month's jobs report to continue the trend of "low hiring, low layoffs" that has been present for the past year or so.
Traders generally expect this non-farm payroll report to "return to normal": moderate job growth, stable unemployment, and continued gradual wage increases .
Meanwhile, with inflation accelerating and surpassing the Fed's 2% target, traders have largely priced in no further rate cuts from the Fed this year . The CME Group's FedWatch tool shows a 0.5% probability of a 25 basis point rate hike in April and a 99.5% probability of keeping rates unchanged. By June, the probability of a cumulative 25 basis point rate cut is 6.0%, the probability of keeping rates unchanged is 93.5%, and the probability of a cumulative 25 basis point rate hike is 0.5%. By December, the probability of a cumulative 25 basis point rate cut is 35.1% (25.1% the previous day), the probability of keeping rates unchanged is 50.2% (73% the previous day), and the probability of a cumulative 25 basis point rate hike is 14.7% (1.9% the previous day).
Clearly, traders are coming to the conclusion that even if Kevin Warsh, Trump's nominee for the next Federal Reserve chairman, takes office, the case for further rate cuts in the short term will be a tough battle .
Non-farm payroll forecast
Pay attention to historically reliable leading indicators to help interpret each non-farm payroll report:
(Non-farm payroll leading indicators chart, source:)
Based on the above data, leading indicators suggest that this month's non-farm payroll data may be higher than expected, with overall job growth likely between 100,000 and 140,000.
Other aspects of this release—including the closely watched average hourly earnings and unemployment rate—will also influence how the market reacts to the data.
Technical Analysis of the US Dollar Index
On Friday, during the Asian and European sessions, the US dollar index fluctuated narrowly around 100.00. From a technical perspective, driven by continued safe-haven demand, the dollar is currently trading near the top of its ten-month range against major currencies. Unless there is progress in reopening the Strait of Hormuz, any pullback in the dollar is likely to be short-lived.
The US dollar index continues to rise within a bullish channel, approaching a ten-month high near 100.64. This resistance level remains a strong barrier, having suppressed price increases six times since May of last year. The more times this resistance level is tested, the greater the likelihood of a breakout.
If the dollar does indeed confirm a break above the 100.64 resistance level—whether driven by a strong jobs report or the ongoing escalation of tensions in the Middle East—the next level to watch will be the yearly high near 101.00. On the other hand, particularly weak non-farm payroll data, or signs of a potential ceasefire in Iran, could break the current bullish channel, setting the stage for a pullback to 99.00 or 98.00 later this month. However, for now, this scenario seems less likely.
(US Dollar Index Daily Chart, Source: FX678)
At 14:53 Beijing time, the US dollar index is currently at 100.00.
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