Reaction to the jobs report. Stocks lower, yields higher, US dollar higher | Forexlive

The US payroll data came in better-than-expected with the unemployment rate falling to 3.7% from 3.9%. Earnings were hiring 0.4% versus 0.3%. And non-farm payroll was also stronger at 199K versus 180K.

Just ahead of the report, the stock futures were implying:

• Dow Industrial Average down -17 points
• S&P -4 points
• Nasdaq index -40 point

The US yield curve before the report showed:

• 2-year yield 4.647%, +6.8 basis points
• 5-year yield 4.190% +7.8 basis points
• 10-year yield 4.191% +6.2 basis points
• 30-year yield 4.286% +4.1 basis points

After the report (4 minutes after the release), stock futures are moving lower, and yields are moving higher.

• Dow Industrial Average is now down -67.3 points
• S&P index is down -14.34 points
• Nasdaq index is down -102 points

The stock market has to decide if it is too hard or just right. Job growth means stronger economy. The concern is the Fed and inflation.

In the US debt market:

• 2-year yield 4.708% +12.8 basis points
• 5-year yield 4.256% +14.5 basis points
• 10-year yield 4.254% +12.5 basis points
• 30-year yield 4.341% +9.6 basis points

There are about 110 basis points of cuts in 2024 now down from around 125 basis points prior to the release. A lot of cuts were priced in prior to the number. This number will slow that idea up.

Looking at some of the major currency pairs:

EURUSD: The EURUSD fell below its 100-day moving average 1.0763.. The 50% midpoint of the move up from the November 1 low is just around that level of 1.0766. That area is now close risk. Staying is more bearish. On the downside the first target 1.0725 was reached with a low at 1.0723. The current price is trading 1.0739. A move below that level would target the 61.8% retracement of the move up from the November 1 low. That level comes at 1.0707. Risk for shorts on the break lower is now a move back above the 1.0763 – 66 level. Staying is more bearish.

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• Source: https://www.forexlive.com/news/reaction-to-the-jobs-report-stocks-lower-yields-higher-us-dollar-higher-20231208/