Good morning. The Nonfarm Payrolls (NFP) report has been released monthly since 1939, making it one of the longest-running economic indicators in the U.S.
It covers about 80% of the workforce, but leaves out farmers, military, and certain government jobs. That’s why markets call it “nonfarm” even though everyone’s watching it.
-Shaun A, Jonathan Kibbler, Jordon Mellor
MARKETS
How’s your favorite today?
Prices supplied by Google Finance as of 4:00am ET - stock prices as of close. Here is what the prices mean.
NEWS
Jobs Shock Deepens the Fed’s Dilemma
The U.S. labor market just sent a chilling signal and it couldn’t have come at a more fragile moment.
The ADP private payrolls report showed a 32,000 drop in jobs for September, against expectations for a 50,000 increase. To make matters worse, August’s supposed gain of 54,000 was revised into a small decline. For us traders, it’s not just weak data, it’s a reminder that the Fed may be flying blind while Washington’s shutdown keeps official numbers offline.
Here’s what you need to know:
1. Bad News Is Now “Good News”
In classic market fashion, traders leaned into the weak report as fuel for rate cut bets. With no official government payrolls release due Friday, markets are embracing the idea that every piece of weak private data raises the odds of more easing. Current pricing now reflects quarter-point cuts at each of the Fed’s remaining meetings this year.
Equities loved it. High-growth chipmakers led Wall Street higher, and the risk-on wave spread across Asia, lifting markets from Tokyo to Taipei. European futures followed suit, pointing firmly higher.
2. Bonds and the Dollar React
Short-term U.S. Treasury yields dipped further in Tokyo, hitting a fresh two-week low. That kept the dollar under pressure, pinned near a one-week trough against major peers. Weak jobs plus rate cut hopes is not a recipe for dollar strength, and traders know it.
Gold, meanwhile, is catching its breath after its surge near $3,900. Even in consolidation, our favorite metal is holding firm near $3,866, a sign that dip-buyers are still lurking.
3. Fed Left in the Dark
The bigger risk? With Washington gridlocked, the Fed may not have the data it needs before its October 29 decision. The shutdown has already blocked the release of jobless claims and could stall Friday’s nonfarm payrolls report. That leaves the central bank relying on private surveys like ADP and Challenger layoffs, imperfect tools at best.
My Takeaway
The U.S. jobs market looks weaker than anyone expected, and the timing couldn’t be worse. With official data frozen and politics in Washington at a standoff, the Fed is left second-guessing. For traders, that means volatility stays alive, in the dollar, in gold, and in yields.
Weak jobs might be “good news” in the short run, but it’s a dangerous game when central banks are steering with fogged-up windshields.
TRADER INSIGHTS
A Technical Setup Meets Macro Pressure
CHF/JPY has been on a relentless uptrend this year, but momentum could be shifting.
On the weekly chart, we’re now seeing a classic bearish divergence, where price prints higher highs but the stochastic oscillator forms a lower high.
That alone isn’t enough to make a confident trading decision, but the macro could back this up.
SNB Is Dovish
The Swiss National Bank (SNB) has been more dovish than most central banks, cutting interest rates to zero. Rates could turn negative again. If that happens the CHF becomes a negative carry trade once more.
And let’s be honest, the CHF is overvalued, especially against currencies like JPY that are now benefiting from safe haven flows.
Switzerland Agrees Not to Manipulate Its Currency
This has been a common theme since President Trump took over office again in the U.S. The SNB has often been accused of intervening to weaken CHF when it got too strong.
Now in a report today, they’re publicly aligning with the U.S. to avoid manipulation.
JPY Strength Is Quietly Building
Meanwhile, the Japanese yen has been staging a comeback.
Lower U.S. yields, global risk-off sentiment, and positioning unwinds are all favoring JPY strength.
CHF/JPY has been propped up by JPY weakness for a long time. But if that dynamic flips? This could unravel fast.
The Trade Idea: CHF/JPY Reversal
Chart: Weekly bearish divergence forming
Macro: CHF overvalued, SNB could head into negative rates.
JPY tailwinds: Risk-off flows, yield differentials, BoJ speculation.
Narrative: The CHF has fewer defenders now, and the JPY is gaining some ground.
Watch for a break below key support levels. A confirmation of divergence with momentum breakdown could trigger a medium-term move lower.
CHART BREAKDOWN OF THE DAY (NZD/CAD)
NZD/CAD is rebounding from the lower bound of its descending channel near 0.8020, now testing resistance around 0.8130–0.8180 where the 50-day and 200-day SMAs converge. The broader trend remains bearish as long as price stays inside the channel, but a breakout above 0.8180 could signal a shift in momentum toward 0.8270. On the downside, failure to hold current gains risks another move back toward 0.8090 and 0.8020 support.
DAILY TRADING PSYCHOLOGY NUGGET
“Confidence comes from preparation, not prediction.” A trader who prepares for different scenarios is calm when volatility hits, while those who rely on guesses get shaken out. The edge isn’t in knowing the future, but in being ready for it.
TODAY’S MOST TRENDING MARKET NEWS (OCTOBER 2, 2025)
credits: Stringer/File Photo
Oil rebounded sharply today, recovering from a three-day slide as traders positioned for tighter sanctions on Russian crude and heightened geopolitical risk. Brent rose ~0.57% and WTI ~0.55%, with buying support emerging near key technical levels.(source: reuters)
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ANSWER
Answer: Market Volatility