US non-farm payrolls exceed estimates

The much better-than-expected non-farm payrolls report injected some much needed volatility into the market, and the dollar has been the biggest gainer on the back of it, while gold is suffering.

US flags
Source: Bloomberg

The October report showed that 271,000 jobs were added, which compared with the forecast of only 185,000. The poor September number was revised down to 137,000 from 142,000 – but today’s headline number took all the attention. The unemployment rate dropped to 5%, in line with market expectations. The hidden gem of the announcement was the average hourly earnings which rose by 0.4% and 2.5% on a monthly and yearly basis respectively. The combination of falling unemployment and rising earnings has increased the likelihood of an interest rate hike from the Federal Reserve in December.

The greenback jumped on the announcement, while the euro and the pound lost out heavily. The so-called commodity currencies like the Australian and Canadian dollar also declined at the hands of the US dollar. Gold and silver quickly lost ground after the announcement, and their outlook is bleak. Both Wall Street and the US 500 had a move in either direction in the wake of the announcement, and both are drifting lower as higher interest rates could be achieved this year. 

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