<ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-september-non-farm-payrolls-263k-vs-250k-expected-20221007/“>US September non-farm payrolls +263K vs +250K expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/canada-september-employment-change-211k-vs-200k-expected-20221007/“>Canada September employment change +21.1K vs. +20.0K expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-williams-the-economy-has-shown-extraordinary-strength-post-pandemic-20221007/“>Fed’s Williams: The economy has shown extraordinary strength post-pandemic</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/atlanta-fed-gdpnow-estimate-for-3q-growth-rises-to-29-from-27-20221007/“>Atlanta Fed GDPNow estimate for 3Q growth rises to 2.9% from 2.7%</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-nagel-the-next-ecb-meetings-must-send-out-clear-signals-on-reacting-to-inflation-20221007/“>ECB’s Nagel: The next ECB meetings must send out clear signals on reacting to inflation</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/baker-hughes-oil-rigs-down-2-to-602-in-the-current-week-20221007/“>Baker Hughes oil rigs down -2 to 602 in the current week.</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/scholz-everyone-knows-that-energy-bailout-packages-are-necessary-and-coming-everywhere-20221007/“>Scholz: Everyone knows that energy bailout packages are necessary and coming everywhere</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-august-wholesale-sales-01-vs-04-expected-20221007/“>US August wholesale sales +0.1% vs +0.4% expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/snbs-jordan-swiss-inflation-above-3-is-clearly-too-high-20221007/“>SNB’s Jordan: Swiss inflation above 3% is ‚clearly too high'</a></li></ul><p>Markets:</p><ul><li>Gold down $16 to $1695</li><li>US 10-year yields up 6 bps to 3.88%</li><li>WTI crude up $4.06 to $92.51</li><li>S&P 500 down 115 points to 3629</li><li>USD leads, NZD lags</li></ul><p>The Fed-pivot talk went down in flames today and it didn’t even take a big surprise in the jobs report. The headline was basically bang-on expectations but unemployment fell two ticks to 2.5% with half of that from a dip in labor force participation.</p><p>Beyond that the details didn’t matter and I have to think that the weight of all the hawkish Fed talk this week added to the tumble. The dollar rose on the data and then rose again late in the day as equities crumbled. The Nasdaq fell 4% to nearly give up the week’s gains.</p><p>Cable fell nearly a full cent to 1.1063 from as high as 1.1225 before the jobs report. It’s trading at the lows just ahead of the close.</p><p>AUD and NZD are similar while EUR/USD is just above the knee-jerk lows after the jobs data. The real worry going into Monday’s open may be USD/JPY as it presses to 145.40 and test’s the Japanese Ministry of Finance’s patience. </p><p>USD/CAD was able to hold the earlier highs on a sizzling day for oil. Crude has swung from demand worries to supply fears and rallied every day this week. Mission accomplished for OPEC+ and the moves will make the BOC’s job a bit easier.</p><p>All told, this was a rough day for risk assets and a strong start to Q4 has turned into a dud.</p>

This article was written by Adam Button at forexlive.com.

<p>Closing changes for the main US markets:</p><ul><li>S&P 500 down 104 points to 3639 or -2.9%</li><li>Nasdaq Comp -3.8%</li><li>Russell 2000 -3.2%</li><li>DJIA -2.1%</li><li>Toronto TSX Comp -2.35%</li></ul><p>On the week:</p><ul><li>S&P 500 +1.4%</li><li>Nasdaq Comp +0.5%</li><li>Russell 2000 +1.9%</li><li>Toronto TSX Comp +0.4%</li></ul><p>That SPX candle was looking really nice earlier this week. Meanwhile, WTI crude finished the week up 17%.</p>

This article was written by Adam Button at forexlive.com.

<p>The trade in the first half of the year was to sell stocks and buy oil. </p><p>That’s shaping up to be the trade of Q4 as well. WTI crude oil are up 5% today and briefly touched $93.00, which is the highest since August 30. It’s also come on a day with a strong US dollar and a brutal decline in equities.</p><p>Energy could be a big problem for the global economy next year. There are people talking about the potential for a second wave of inflation on renewed strength in oil and gas.</p><p>I don’t think that that’s a big risk. Oil and gas alone in a soft economy aren’t going to stoke inflation. Even if commodity strength extends to metals and softs it won’t offset weakness in things like housing and manufactured goods.</p><p>In any case, what’s the trade for oil next?</p><p>It’s turned around on a fundamental surprise — OPEC+ cutting 2 million barrels per day from quotas and around 1mbpd in real production. Moreover, that move sets a floor under oil prices and sends a signal that they mean business.</p><p>Up until last week, the trade was demand destruction but risks are growing of supply destruction from Russia and demand growth from China reopening. In addition, the SPR releases are coming to an end.</p><p>Technically, have a look at the weekly chart:</p><p>That’s a powerful three-candle reversal. What’s needed next is a decisive move about the series of lows in the $93-95 region.</p>

This article was written by Adam Button at forexlive.com.

<p>The selling in equities today is utterly merciless.</p><p>The combination of stridently-hawkish talk from Fed officials this week and a decently-strong non-farm payrolls report today has led to an abandonment of the ‚Fed pivot‘ trade.</p><p>The week had started out with a +5% gain but now the Nasdaq is barely in positive territory, up just 0.7%.</p><p>I can’t help but think that the inabilty to maintain even a modest rally from the June/Sept lows is a sign of a potential rout. I pity to think what will happen if next Thursday’s CPI report is hot.</p>

This article was written by Adam Button at forexlive.com.

<p>USD/JPY is up 20 pips today and trading at 145.30.</p><p>In all liklihood that will be the highest close in 20 years for USD/JPY and it’s the highest intraday trade since they intervened at 145.90.</p><p>The Ministry of Finance may be pressed to intervene again. The problem is that they’re fighting a fundamental battle. The US dollar is strengthening across the board in the aftermath of a strong non-farm payrolls report. The market is beginning to wonder if the Fed hiking to just under 5% will be enough to tame inflation.</p><p>The MOF has often pointed to ‚volatility‘ rather than absolute price levels in its jawboning and intervention. We’ve been around 144.00 now for a month so certainly the one-way moves have been tamed. </p><p>But if they allow the pair to move to new highs, I suspect the market will quickly test 150.00. Domestically, the economic calendar is very light for Japan next week.</p>

This article was written by Adam Button at forexlive.com.