TGIF. It is US jobs day, and traders are heading into the North American session with a mixed dollar, modestly lower Treasury yields and higher US stock futures. Canada’s employment report will be released next week, leaving today’s focus squarely on the US labor market.
The September jobs report is expected to show a gain of 90,000 jobs, down from 162,000 in August. The unemployment rate is expected to remain at 4.1%, while average hourly earnings are forecast to rise by 0.3% for the month.
The market is pricing roughly a 21% chance of a Fed rate hike in October. A stronger jobs report, particularly if accompanied by stronger wage growth, could push those expectations higher. A softer report could reduce the urgency to tighten further.
For traders, the headline payroll number is only part of the story. Revisions to previous months, unemployment and wages will help determine whether the initial market reaction has staying power.
The dollar is mixed ahead of payrolls
The dollar is lower against the JPY, GBP, CHF, AUD and NZD. It is higher against the CAD and modestly higher against the EUR, although the euro’s change rounds to unchanged in the supplied snapshot.
The Swiss franc has the largest gain against the dollar as it continues to correct and makea a break below its 200 hour MA and upward sloping trend line. The question for the pair is can it stay below the 200 hour MA now at 0.8291. Stay below and move to 0.82167 would be targeted (38.2% of the trend move up from the August 20 low (see chart below).
The Canadian dollar is the weakest after it remains above its 100 hour MA:
A summary of the changes today:
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EURUSD: 1.1241, essentially unchanged at the displayed precision.
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USDJPY: 157.77, down 0.19%.
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GBPUSD: 1.3209, up 0.08%.
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USDCHF: 0.8282, down 0.30%.
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USDCAD: 1.4240, up 0.15%.
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AUDUSD: 0.6937, up 0.12%.
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NZDUSD: 0.5609, up 0.11%.
That mixed performance comes after the dollar index briefly reached its highest level since May 2025, near 102, according to MUFG’s assessment covered by InvestingLive. Today’s jobs report becomes the next test of that dollar strength.
US futures point higher
At 7:40 AM ET, futures were implying gains across the major indices:
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Dow: Up 208 points.
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S&P 500: Up 36 points.
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Nasdaq 100: Up 170 points.
Lower oil and the continued easing in Treasury yields provide a more supportive backdrop ahead of the employment report. However, the 8:30 AM ET release could quickly change that setup.
Treasury yields edge lower after yesterday’s sharp fall
US yields are modestly lower across the key maturities:
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2-year: 4.7809%, down 0.61 basis points.
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5-year: 4.9926%, down 1.24 basis points.
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10-year: 5.2242%, down 0.98 basis points.
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30-year: 5.5989%, down 0.41 basis points.
Today’s moves are small compared with yesterday’s sharp decline. The question is whether the jobs report reinforces that move or gives yields a reason to reverse higher.
Oil falls as Europe discusses emergency reserve releases
Crude oil is sharply lower, with the supplied WTI futures quote at $89.32, down $3.55, or 3.82%.
Reuters reports that France has proposed releasing 50 million barrels of diesel from European reserves, alongside 50 million barrels of crude oil across International Energy Agency members. The discussions follow US pressure on Europe to release fuel inventories and the threat of a US diesel export ban. These remain proposals rather than an agreed release.
The potential additional supply offers some relief for energy markets. For the broader economy, sustained lower fuel prices would help ease inflation pressure, although emergency stock releases do not resolve the underlying supply disruptions.
Elsewhere in the supplied market snapshot:
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Spot gold: $4,183.11, up $5.73, or 0.14%.
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Silver: $61.02, up 0.13%.
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Copper: $6.5685, up 0.47%.
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Bitcoin: $86,425, up $1,572, or 1.85%.
Eurozone inflation rises to 3.8%
Eurozone preliminary September inflation came in above expectations:
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Headline CPI: 3.8% year-on-year versus 3.6% expected and 3.2% previously.
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Core CPI: 2.5% year-on-year versus 2.5% expected and 2.4% previously.
Energy remains the main driver, with prices up 18.8% from a year earlier. However, services inflation also increased to 3.2% from 3.0%.
For the ECB, the concern is whether the energy shock spreads more broadly into underlying inflation. Headline inflation approaching 4% keeps pressure on policymakers, even as higher bond yields tighten financial conditions. See InvestingLive’s Eurozone inflation report.
European equities are nevertheless trading higher:
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Germany DAX: 25,223.84, up 1.14%.
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France CAC 40: 7,888.32, up 0.68%.
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UK FTSE 100: 10,454.89, up 0.26%.
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Spain IBEX 35: 19,052.79, up 0.25%.
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Italy FTSE MIB: 50,313.08, up 0.15%.
The North American calendar
At 8:30 AM ET, the US September employment report is released:
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Nonfarm payrolls: 89,000 expected versus 162,000 previously.
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Unemployment rate: 4.1% expected versus 4.1% previously.
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Average hourly earnings, month-on-month: 0.3% expected versus 0.3% previously.
At 10:00 AM ET:
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Factory orders: 0.1% expected versus 0.9% previously.
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Feds Logan, president of the Dallas Fed, is scheduled to speak.
Canada’s jobs report is due next week.
Let the price action confirm the story
Jobs reports can produce a fast move in one direction followed by a reversal as traders digest wages, unemployment and revisions. That makes the technical levels particularly useful. A break is a start. Staying beyond the level is what gives buyers or sellers more control.
In the morning video above, I take a look at the three major currency pairs—EURUSD, USDJPY and GBPUSD—from a technical perspective. For each pair, I outline the bias, the risk-defining levels and the targets that would give either the buyers or sellers more control.
This article was written by Greg Michalowski at investinglive.com.