The latest non-farm payroll numbers massively exceeded expectations on Friday, as it was revealed that no less than 254 thousand new jobs were added in September. The figures for previous months were also revised to the upside, painting a very strong picture for the US labour market. The data were enough to prompt an immediate shift in sentiment with regards to future rate cut expectations. The possibility of another 50 bps cut in November has now been completely taken off the table, with odds now heavily favouring a mere 25 bps reduction and some even predicting no change at all.
The Dollar saw substantial inflows on Friday, to the detriment of the Yen and the Pound in particular; the DXY climbed over half a percent back up to 102.5. US indices also took the news well, the Nasdaq Composite climbing 1.2%, the S&P 500 gaining 0.9% on the day and the Dow Jones reaching yet another daily record close after finishing 0.8% in the black.
Despite some measure of volatility, gold finished Friday’s session more or less where it started, ending the week at $2,653 an ounce. More interestingly, silver came within a hair’s breadth of $33 before settling for a 0.6% gain on the day. The volatility extended to oil markets, which closed the week higher still following geopolitical pressures in the middle east.
Traders will once again have to wait until later in the week for the economic calendar to get interesting. FOMC minutes on Wednesday should whet a few appetites, following which US jobless claims and CPI data on Thursday should be enough to keep market participants entertained.
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