• US major indices close higher for the day. S&P snaps four week losing streak
• WTI crude futures settle at $82.79
• UAW Pres Fain: UAW strike is working but not there yet
• Mortgage rates at 23 year high.
• Baker Hughes oil rig count 497 versus 502 last week. Crude oil is trading little changed
• WSJ’s Timiraos: its a weird payroll report
• European indices close higher on the day. German Dax rises over 1%
• More from ECB Knot: Would prefer a tolerance band around target rate
• US 10 year yield tests the high from earlier the week after stronger US jobs report
• ECBs Knot: We are getting on top of inflation
• Canada September employment 63.8K vs 20.0K expected
• US September non-farm payrolls +336K vs +170K expected
• The GBP is the strongest and the JPY is the weakest as the North American session begins
• Forexlive European FX news wrap: Schnabel won’t rule out more ECB rate hikes

When the US jobs report came out and showed a stronger-than-expected 336K nonfarm payroll jobs (estimate 170K) and revisions of over 100K to the prior month’s, the US dollar moved higher, yields moved higher and stocks moved lower.

However, then people started to look at things like the unemployment rate remaining at 3.8% (despite the gain in jobs), the average hourly earnings coming in at 0.2% – lower than the 0.3% expected – and the year-on-year average earnings dipping to 4.2% which was lower than pre-pandemic levels, the tone in the market started to shift. First it was a correction. Then when technical level started to be taken out in the opposite direction of the initial moves, you could hear the „uh-ohs“, and more and more stories started to explain the strong data away.

• The 10 year yield moved up to 4.887% which took out the high yield from 2 days ago at 4.884%, but started to back off of that level.
• Stocks in premarket trading started to recover some of the losses and then opened with not so bad declines
• The USD recovered some of the earlier gains but was still higher on the day

There were enough pundits who questioned some of the seasonal influences. Some started to refer back to Fed’s Daly and Bostic who implied the rising yields were the equivalent of Fed tightening, and that the Fed moves warranted a pause in policy (who knows if they knew the data?).

The next thing you know, markets start to reverse even more.

• In the US stock market, the „good data equals lower stock prices“, turned around to „good data equals higher stock prices“ i.e. Goldilocks.
• In the bond market, the inability to extend toward 5% in the 10 year became a positive. The 30 year which moved above the 5% level to a high of 5.052%, but then worked its way back down and below the 5% level.
• The USD saw target levels stall the greenbacks rise, and other broken technical levels start to be taken back.

For example,

• The EURUSD moved down to test a key target at 1.0483 and then reversed back above its 100 hour moving average and 200 hour moving averages at 1.0507 and 1.05297 respectively. As London/European traders were looking to exit, a new high was made, the price moved above the 38.2% retracement of the move down from the September 12 high at 1.05709, and extended to just short of 1.0600.
• The GBPUSD initially fell down to test the corrective low from Wednesday’s trade, the day low from Thursday’s trade both at 1.21056. The low price today reached 1.21053 and like the EURUSD, moved back above its broken 100-hour moving average (currently at 1.21326) and 200-hour moving average (currently at 1.21536). That turned sellers to buyers. The price later moved above the 38.2% retracement of the move down from the September 11 high at 1.22316. Then made a new high for the week at 1.2258. The price is closing above that level for the trading week.
• The AUDUSD fell below its 100-hour moving average of 0.6340 after the jobs report, but then rebounded back above that level and also back above its 200-hour moving average at 0.63726.
• The USDCHF moved up to test its near converged 100 and 200-hour moving averages shortly after the jobs report near 0.9166. It found willing sellers against that level in reversed down to a low for the day and week at 0.9072.
• The NZDUSD stalled its initial fall after the jobs data near the 100 hour MA at 0.5931, bounced back above its 200 hour MA at 0.59469, and extended to an intraday high at 0.6002 (just above natural resistance at 0.6000). The price is closing the day at 0.59883.

Overall, the NZD is ending the day is the strongest of the major currencies. The JPY is the weakest. The USD is down vs all the major currencies with the exception of the JPY.

In the US interest rate market, yields remain higher on the day but off the highest levels:

• 2-year yield 5.081%, +5.6 basis points
• 5-year yield 4.751%, +6.8 basis points
• 10-year yield 4.794%, +7.9 basis points
• 30-year yield 4.959%, +7.3 basis points

In the US equity markets, the major indices all close solidly higher led by the NASDAQ index. For the trading week, the S&P snapped a 4-week losing streak. The Dow industrial average was still negative on the week. The NASDAQ and the closed higher for the week:

• Dow industrial average rose 288.01 points or 0.87% at 33407.59. For the trading week the index fell -0.30%.
• S&P index rose 50.31 points or 1.18% at 4308.49. For the trading week the index gained 0.48% thanks to today’s move higher.
• NASDAQ index rose 211.50 points or 1.60% at 13431.33. For the trading week the index gained 1.6% after starting the day unchanged for the week.

Next week US CPI data be released on Thursday. Hope springs eternal that the Fed is now able to maneuver through strong employment without inflation moving higher. Time will tell, but today the market celebrated

This article was written by Greg Michalowski at www.forexlive.com.