4 min read The May Non-Farm Payrolls (NFP) report was released, showing job gains of 172k in the U.S., smashing expectations of 85k and marking a third straight month of solid jobs growth. April’s figure was also revised higher to 179k from 115k.
The U.S. unemployment rate remained unchanged at 4.3%, as expected, and wage growth was 0.3% MoM, as forecast, up slightly from 0.2% MoM in April.
The data shows that after a weak 2025, the US labour market has ramped up despite the Middle East conflict. The report reinforces the Federal Reserve’s focus on inflation and demolishes the case for any Fed rate cut in the coming months. The risk is more skewed towards rate hikes.
The market is now fully pricing in a 25-basis-point hike before the end of the year.
The markets are responding with the S&P 500 futures under pressure and the USD recovering from session lows.
DOLLAR INDEX (DXY):
The USD traded -0.23% at 98.90 ahead of the NFP report and has since risen to 99.20. On the 4-hour chart, the DXY price has been trading within a holding pattern since mid-May, capped by 99.50 on the upside and 99.00 on the downside. Buyers will look to break out above 99.50.
DOLLAR VS YEN (USD/JPY):
If we take a closer look at the technicals, we can see that USD/JPY was trading at 159.85 ahead of the data and at 160.00 following the NFP report. USD/JPY is testing a key resistance at 160.00, a level at which Japanese authorities have previously stepped in to support the yen.
S&P 500 (SDX):
The S&P 500 traded -0.4% at 7550 ahead of the report, easing away from record highs, and trades -0.6% following the NFP data. The price has slipped below the 50 SMA as momentum fades. The index is set to close in the red this week after 9 straight weekly gains, the longest stretch since 1985.
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