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.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.