4 min read The September Non-Farm Payrolls (NFP) report was released, showing job gains of just 29k in the U.S, well below forecasts of 90k and August’s headline figure was revised lower.
The U.S. unemployment rate unexpectedly rose to 4.2% from 4.1%. Wage growth was 0.1% MoM, below 0.3% expected. This raises questions over the outlook for consumer spending.
The report suggests that the labour market is softening but with the three month average now at 50k, this suggests that jobs growth is solid not hot.
The market has lowered Federal Reserve rate hike expectations to just 22 basis points of tightening, down from 26 bps prior to the data. This means the market is no longer expecting the Fed to hike this year.
The markets are responding with the USD falling from its 17-month high while the S&P 500 is rising and the Nasdaq 100 futures have hit a record high.
DOLLAR INDEX (DXY):
The US Dollar index was trading +0.06% at 101.75 ahead of the data and trades -0.1% at 101.60 after. The price still trades above the 50 and 200 EMAs and the rising trendline support on the 4-hour chart in a bullish picture. The price reached a 17-month high of 102.2 before easing back, pulling the RSI out of overbought territory. Buyers will look to extend gains towards 103.00
DOLLAR VS YEN (USD/JPY):
The USD/JPY was trading -0.29% at 157.60 ahead of the data and trades -0.60% post release at 157.20. If we take a closer look at the technicals, we can see that USD/JPY trades within a symmetrical triangle. The price ran into resistance at 158.45, the upper bound of the triangle and rebounded lower breaking below the 200 EMA to test the rising trendline support at 157.00. AA break below here brings 156.50 into focus.
S&P 500 (SDX):
The S&P 500 traded +0.5% at 7705 ahead of the data and is now +0.8% at 7730. The price has broken out of the descending channel within which it has traded since late September. Buyers will look to extend the upside towards 7775 the September high and 7810 the record high.
Trading involves risk.
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