U.S. jobs data fuel market volatility – DBS

The US Dollar (USD) remained nearly unchanged at 100.2 after mixed U.S. jobs data, as investors turn their focus to the Fed and the upcoming holiday-shortened trading week, DBS' Senior FX Strategist Philip Wee notes.

Fed December rate-cut probability plunges

"The Dolllar Index (DXY) ended overnight barely changed at 100.2 following a volatile session driven by a mixed US jobs report for September. Nonfarm payrolls (NFP) improved to 1196k in September, beating the 53k consensus, but August was revised to minus 4k while the unemployment rate increased to a four-year high of 4.4% from 4.3%."

"Moreover, the October jobs report, which will likely capture the negative impact of the government shutdown, has been delayed to December 16, after the FOMC meeting on December 10. The FOMC Minutes for the October 28-29 meeting amplified the deep division within the Fed, a primary reason the futures market axed the probability for a December cut to 35% from 92% since the last FOMC."

"Looking ahead, the greenback faces profit-taking risks ahead of next week’s Thanksgiving holiday-shortened trading week. The S&P 500 and Nasdaq Composite Index fell by 1.6% and 2.2% overnight, unable to shake off persistent AI stock overvaluation worries, amid signs that investors are seeking safety in Treasuries. US President Donald Trump may renew pressure on monetary policy."