The initial market moves in the wake of the US nonfarm payrolls data may be wrong and could turn out to be a costly mistake for investors wanting to jump straight in, Steven Mayne, head of research at Falcon Securities, told CNBC.
“Wait for the market to digest the figures and then move in … ignore the first initial move,” Mayne said.
“You’ve got to be very patient on nonfarm payrolls,” he added.
The closely-watched monthly jobs number is forecast to show another contraction of around 225,000 payrolls, according to analysts surveyed by Reuters. But they are divided on the amount of jobs expected to be shed with some expecting as little as 100,000 and as much as 365,000.
Even if an initial gamble pays off it can be dangerous, according to Mayne. He said that investors tend to think the first market move after the data will hold, but it usually reverses and can wipe out the benefits of guessing the numbers correctly.
“Going into the nonfarm payrolls today you’ve got to make sure you’re very neutral. The market can be very volatile … so you don’t want to be either long or short,” he said.
The data is due at 8:30 am New York time.
- Watch the full interview with Steven Mayne above. Steven Mayne.
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