Non-farm payrolls: what happens in the first ten seconds

[Amanhasnoname]

The jobs report produces some of the most violent price action in the calendar. The first ten seconds are a different market from the rest of the day.

Spreads blow out. Liquidity providers pull quotes. Orders get filled with large slippage, or not at all. Price can jump 20 or 30 pips with no trades in between.

Then comes the reaction to the details. Headline job growth, unemployment, wage growth and revisions can all point in different directions. Price may spike one way on the headline and reverse in seconds as the wage figure registers.

Retail traders trying to catch the initial move usually pay heavily in spread and slippage. Many experienced scalpers wait, watching for the market to settle and then trading the second or third move.

The dust settles, spreads narrow and liquidity returns after a minute or two. By then the direction of the real reaction is clearer.

Few events illustrate execution risk as vividly.

The aftermath is just as instructive. Measuring the average spread every second for five minutes after several releases shows how long the cost stays inflated, and many traders are surprised by how slowly it normalises on weaker pairs.

Do you trade payrolls, wait for the aftermath, or stay out?