Jobs Friday

Nick Mastrandrea Market Tea Leaves

USD: Sep '26 is Down at 101.840.

Energies: Nov '26 Crude is Down at 89.62.

Financials: The Dec '26 30 Year T-Bond is Higher by 1 tick and trading at 101.03.

Indices: The Sep '26 S&P 500 emini ES contract is 36 ticks Higher and trading at 7752.00.

Gold: The Dec'26 Gold contract is trading Down at 4199.50.

Initial conclusion

This is not a correlated market. The USD is Down and Crude is Down which is not normal, but the 30-Year T-Bond is trading Higher. The Financials should always correlate with the US dollar such that if the dollar is Higher, then the bonds should follow and vice-versa. The S&P is Higher and Crude is trading Higher which is not correlated. Gold is trading Down which is correlated with the US dollar trading Up. I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one goes Up the other goes Down. Asia traded Mixed. All of Europe is trading Lower.

Possible challenges to traders

Average Hourly Earnings m/m out at 8:30 AM EST. Major.
Non-Farm Employment Change is out at 8:30 AM EST. Major.
Unemployment Rate is out at 8:30 AM EST. Major.
Factory Orders m/m is out at 10 AM EST. Major.
FOMC Member Logan Speaks at 10 AM EST. Major.

We've elected to switch gears a bit and show correlation between the 2-year Treasury notes (ZT) and the S&P futures contract. The YM contract is the Dow Jones Industrial Average, and the purpose is to show reverse correlation between the two instruments. Remember it's likened to a seesaw, when up goes up the other should go down and vice versa.

Yesterday the two year went Higher at around 9 AM EST with various news items pending. The Dow dived Lower at around the same time. Look at the charts below and you'll see a pattern for both assets. The ZT climbed Higher at around 9 AM EST and the Dow dived Lower around the same time. These charts represent the newest version of Bar Charts, and I've changed the timeframe to a 15-minute chart to display better. This represented a Long opportunity on the 2-year note, as a trader you could have netted about 20 plus ticks per contract on this trade. Each tick is worth $6.25. Please note: the front month for the ZT is now Dec '26. I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of Barcharts

Bias

Yesterday we gave the markets a Neutral or Mixed bias which means the markets could go in any direction and often does. Yesterday the markets traded Higher as the Dow gained 21 points and the other indices rose as well. Today given that it is Jobs Friday our bias is Mixed or Neutral.

Could this change? Of Course. Remember anything can happen in a volatile market.

Commentary

Today we view the Labor market to see if the economy is everything the folks in DC say it is.

Author

Nick Mastrandrea

Market Tea Leaves

Nick Mastrandrea over 20 years experience in trading and formerly held a NASD Series 7. He currently holds a NJ Life, Health and Variable Authority. Nick is a published writer and his work has appeared in Futures Magazine, TraderPlanet and others.

AUD/USD bounces back toward 0.6950 on fresh USD supply

AUD/USD bounces back toward 0.6950 in the Asian session on Friday. The US Dollar retreats from 17-month highs as traders take profits off the table ahead of the all-important US Nonfarm Payrolls report. Meanwhile, the Australian Dollar draws support from reviving expectations of a November interest rate hike amid elevated global yields and inflation risks.

USD/JPY struggles near 158.00 as USD retreats ahead of NFP

USD/JPY is struggling for fresh impetus near 158.00, moving away from the top end of its weekly range in the Asian session on Friday, after hotter-than-expected Tokyo CPI and amid a broad US Dollar retreat. Traders reposition themselves ahead of US Nonfarm Payrolls.

Gold remains capped below $4,200 as traders await US NFP for Fed rate cuts

Gold extends its sideways move on Friday, trading below the $4,200 mark heading into the European session as traders await the release of US employment details. The US Nonfarm Payrolls report is expected to show that the economy added only 90K jobs in September, down from the previous month's reading of 162K.

Pi Network retreats to key support level as selling pressure resurfaces

Pi Network price remains volatile in the near term, hovering around $0.0900 at press time on Friday after losing over 3% the previous day. The pullback warns of a steeper correction, with a risk of breaking below a rising wedge pattern on the four-hour chart. Pi Network struggles to maintain a steady recovery as the price remains capped below the $0.1000 psychological barrier.

US Nonfarm Payrolls expected to soften in September

The United States Bureau of Labor Statistics is set to release September Nonfarm Payrolls (NFP) data on Friday at 12:30 GMT. Investors expect NFP to rise by 90K in September following August’s impressive 162K increase. The Unemployment Rate is seen holding steady at 4.1%, while the monthly wage inflation, as measured by the change in Average Hourly Earnings, is projected to hold steady at 0.3%.

Markets are pricing a Fed pause. The jobs data says the hike is still coming

The market has rapidly changed its mind about the Federal Reserve (Fed). Only a week ago, investors saw an October interest-rate hike as the most likely outcome. However, softer inflation and cautious comments from policymakers have since turned a pause into the dominant scenario. Yet beneath that dramatic repricing, the US economy is sending a considerably less dovish message.