Forexlive Americas FX news wrap: US unemployment rate jumps

<ul><li><a href="https://www.forexlive.com/news/us-august-non-farm-payrolls-187k-vs-170k-expected-20230901/">US August non-farm payrolls +187K vs +170K expected</a></li><li><a href="https://www.forexlive.com/news/us-august-ism-manufacturing-pmi-476-vs-470-expected-20230901/">US August ISM manufacturing PMI 47.6 vs 47.0 expected</a></li><li><a href="https://www.forexlive.com/news/canada-q2-gdp-00-vs-12-expected-20230901/">Canada Q2 GDP -0.2% vs +1.2% expected</a></li><li><a href="https://www.forexlive.com/news/baker-hughes-us-oil-rig-count-unchanged-this-week-20230901/">Baker Hughes US oil rig count unchanged this week</a></li><li><a href="https://www.forexlive.com/news/atlanta-fed-gdpnow-steady-at-56-after-ism-manufacturing-report-20230901/">Atlanta Fed GDPNow steady at 5.6% after ISM manufacturing report</a></li><li><a href="https://www.forexlive.com/news/us-july-construction-spending-07-vs-05-expected-20230901/">US July construction spending +0.7% vs +0.5% expected</a></li><li><a href="https://www.forexlive.com/centralbank/feds-mester-inflation-still-too-high-but-sees-progress-20230901/">Fed's Mester: Inflation still too high, but sees progress</a></li><li><a href="https://www.forexlive.com/news/us-august-final-sp-global-manufacturing-pmi-479-vs-470-prelim-20230901/">US August final S&amp;P Global manufacturing PMI 47.9 vs 47.0 prelim</a></li><li><a href="https://www.forexlive.com/news/canada-august-sp-global-pmi-480-vs-496-prior-20230901/">Canada August S&amp;P Global PMI 48.0 vs 49.6 prior</a></li></ul><p>Markets:</p><ul><li>Gold flat at $1940</li><li>US 10-year yields up 8.8 bps to 4.18%</li><li>WTI crude oil up $2.25 to $85.88</li><li>S&amp;P 500 up 0.1%</li><li>USD leads, CAD lags</li></ul><p>The initial market reaction to the non-farm payrolls report was about what you would expect — USD selling, bonds bid — but then it got complicated. The initial moves reversed and bonds sold off, leading to a strong bid in the US dollar. The moves grew increasingly aggressive with USD/JPY slumping to 144.45 then soaring to 146.16 — nearly 180 pips.</p><p>The dollar roared elsewhere as well with EUR/USD tumbling to levels just above the August lows. That wiped out what had been a promising rally this week for the euro bulls.</p><p>Cable rose to 1.2713 on the US jobs report then dropped 1.2580 before trading sideways into the US long weekend. </p><p>The only currency with a relatively straightforward move was CAD as a poor GDP report sank the loonie initially and then USD strength did the rest. The result was a 90-pip rise in USD/CAD to 1.3600, also wiping out some decent progress that had been made earlier in the week.</p><p>The big question left to answer is: Why the sudden jump in bond yields on what was a dovish jobs report? Some pointed to modest strength in the ISM survey along with the energy price rise but that's hardly compelling. Other talk centers around rate lock selling and I can't help but wonder if Chinese bond sellers were looking for liquidity. There isn't an easy answer and the long weekend along with the turn of the calendar were also cited.</p><p>The lack of a clear explanation puts the US dollar rally on a shaky foundation. We'll have to sort it out next week — enjoy the weekend.</p>

This article was written by Adam Button at www.forexlive.com.