Market reaction to US non-farm payrolls

<p>The US non-farm payrolls report and unemployment rate for September were released Friday morning. Prior to the announcement, the consensus was for 215K net new […]</p>

The US non-farm payrolls report and unemployment rate for September were released Friday morning.

Prior to the announcement, the consensus was for 215K net new jobs. The actual number came out at 248K, a significant increase over expectations. In addition, August’s worse-than-predicted 142K figure was revised up to 180K.

The prior consensus was for the unemployment rate to remain at 6.1%. The actual rate came out lower at 5.9%, which is also significantly better than had been anticipated.

Overall, the key numbers that were released on Friday morning were substantially better than expected.

US stock index futures had advanced prior to the announcement. After the announcement, stock prices initially increased even further.

Immediately after the announcement, the US dollar rose sharply, as can be seen on the EUR/USD, which dropped down from the 1.2600 handle to approach the 1.2500 price area. This extends the steep bearish trend for the already-embattled currency pair, marking a new two-year low. The next downside targets reside around the 1.2450 and then 1.2300 levels.

USD/JPY rose sharply from the 109.00 level to continue its recent bullish run and approach its six-year high of 110.00, which was reached earlier this week. A major target further to the upside resides around the 114.00 level.

Gold plunged briefly below the 1200 level after the announcement, continuing its recent declines towards its long-term lows around the 1180 price level.

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