US: NFP opens the door to large rate hikes – UOB

Pablo Piovano FXStreet

Senior Economist at UOB Group Alvin Liew reviews the latest release of US Nonfarm Payrolls for the month of September.

Key Takeaways

“The US NFP again exceeded expectations, adding 263,000 jobs in Sep while the unemployment rate unexpectedly eased to 3.5% (from 3.7% in Aug) as labor force participation dipped while the unemployed numbers fell by 261,000 to 5.75 million. Wage growth continued at an expected pace of 0.3% m/m, 5.0% y/y (from 0.3% m/m, 5.2% y/y in Aug).”

“The Sep report pointed to continued hiring momentum and persistent above 5% wage growth in a tight labor market environment, bolstering the case for the Fed to hike rates by a 4th consecutive 75bps in the next Nov FOMC. Attention will now shift to various Fed senior officials speaking this week and Sep CPI (13 Oct), which will shape Fed expectations before Nov’s FOMC.”

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD drops to daily lows near 1.1630

EUR/USD now loses some traction and slips back to the area of daily lows around 1.1630 on the back of a mild bounce in the US Dollar. Fresh US data, including the September PCE inflation numbers and the latest read on December consumer sentiment, didn’t really move the needle, so the pair is still on course to finish the week with a respectable gain.

GBP/USD trims gains, recedes toward 1.3320

GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.

Gold makes a U-turn, back to $4,200

Gold is now losing the grip and receding to the key $4,200 region per troy ounce following some signs of life in the Greenback and a marked bounce in US Treasury yields across the board. The positive outlook for the precious metal, however, remains underpinned by steady bets for extra easing by the Fed.