- US job growth has remained robust in September – 263K jobs gained.
- The Federal Reserve is likely to ramp up its hawkish rhetoric, raising the chances of fast hikes.
- Stock advances will likely remain "bear market rallies," and the dollar's reign is set to continue.
Winter is not coming – at least not to America's labor market, which remains strong, posting another impressive increase in jobs last month. An increase of 263K is just above 250K seen on the economic calendar and just under the "whisper number" which was around 280K. Leading indicators came out above expectations.
That contrasts with Fed Chair Jerome Powell's "pain" talk – to see inflation falling, the economy needs to suffer.
To put this NFP in proportion, I want to note that the US economy gained some 200,000 jobs before the pandemic, and that was considered healthy, steady growth. The economy is doing better.
A negative jobs figure is unnecessary to see the Fed "pivot" from rapid rate rises. Dollar bears and stock bulls only need an NFP of under 100K to reach the "beginning of the end" of Fed tightening – slower rate hikes. Data for September suggest that a fourth consecutive 75 bps hike is cemented.
What about December? Markets foresee a 50 bps hike, and the chances of that softening to 25 bps have dropped.
The focus will soon shift to next week's all-important Consumer Price Index (CPI) report. Seeing peak inflation in the rearview mirror is critical for reaching peak Fed hawkishness and a market turnaround. Yet after Powell's "pain" comments in Jackson Hole, current robust job gains suggest that one weak inflation report is insufficient for a Fed pivot – nor a market one.
Inflation slowed in July only to lift its ugly head in August. The labor market looks pretty – too pretty to provide calm for stock investors or dollar bears.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD consolidates near 1.1350 amid a quiet start to a Big week
EUR/USD keeps its range play intact near 1.1350 in Monday’s European session. The upbeat market mood and easing US Dollar demand fail to provide lift to the main currency pair amid a quiet start to a critical week ahead.
GBP/USD recaptures 1.3300 as US Dollar buying stalls
GBP/USD has picked up fresh bids and regained the 1.3300 mark in the European trading hours on Monday. A pause in the US Dollar advance and a mildly positive risk sentment help the pair recover ground. However, the technical outlook on the daily time frame suggests a weakening bullish trend.
Gold price hangs above $3,265-3,260 support amid receding safe-haven demand and mildly positive USD
Gold price sticks to its bearish bias for the second successive day on Monday and trades just above the $3,265-3,260 pivotal support during the first half of the European session. Despite of mixed signals from the US and China, the optimism over the potential de-escalation of trade tensions between the world's two largest economies turns out to be a key negative factor.
Monero Price Forecast: XMR soars over 50% amid rising demand for privacy coins
Monero (XMR) price is extending its gains by 50% at the time of writing on Monday, following a 9.33% rally the previous week. The main reason for XMR’s rally is speculation that the token, which is widely known for its status as a privacy coin, was used to launder a suspected theft involving 3,520 BTC worth $330.7 million.
Week ahead: US GDP, inflation and jobs in focus amid tariff mess – BoJ meets
Barrage of US data to shed light on US economy as tariff war heats up. GDP, PCE inflation and nonfarm payrolls reports to headline the week. Bank of Japan to hold rates but may downgrade growth outlook. Eurozone and Australian CPI also on the agenda, Canadians go to the polls.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.