How Are Markets Reacting After the Disappointing U.S. Non-Farm Payrolls Report?

image

How Are Markets Reacting After the Disappointing U.S. Non-Farm Payrolls Report?

In October, Non-Farm Payroll data in the U.S. was reported significantly below expectations. The U.S. Bureau of Labor Statistics announced an increase of 12,000 in Non-Farm Payrolls, against an expected increase of 106,000. Additionally, the employment increase for September was revised downward to 223,000. The unemployment rate remained stable at 4.1%. While employment increased in the health and public sectors, a decline was observed in services. The drop in employment was influenced by strike activities and the negative effects of Hurricanes Helene and Milton in October, along with a decrease in employment in the manufacturing sector.

Dollar index fell sharply following the significant slowdown in employment growth in the U.S. labor market. The DXY dropped below 103.7, continuing its downward trend for the week, while the index initially rose to 104.17.

The results of the employment data increased the likelihood of the Fed accelerating interest rate cuts, leading to a faster sell-off of the dollar. Although markets have already priced in a 25 basis point rate cut by the Fed in November, it is thought that following the significantly lower employment data, expectations for a larger rate cut may be priced in as well.

On the other hand, the upcoming U.S. presidential elections are also being factored into the dollar market, with recent expectations favoring Trump's victory being considered a supporting factor for the dollar.

Increased volatility in the market was observed after the U.S. employment data; EUR/USD rose to around 1.09 before retracting to 1.08 and remained stable on a daily basis.

Spot gold increased its intraday gains after the employment data, rising 0.6% in the last hour to $2,760, maintaining a positive outlook. U.S. futures indices maintained their positive outlook before the market opened.

Bitcoin tested below $69,000 today but began to rise before the employment data and subsequently recovered its daily losses, trading again in the $70,000 range after the labor data was released.

In the domestic currency market, USD/TRY remained up by 0.25%, trading at 34.33. EUR/TRY remained stable at 37.38, while gram gold increased by 0.8%, trading close to 3,050 TL.