US Dollar, Gold, S&P 500 React to September NFP Report Miss

US DOLLAR PERKS UP, GOLD PRICE STAYS POSITIVE, S&P 500 FUTURES UNDER PRESSURE IN RESPONSE TO MONTHLY JOBS REPORT

• Nonfarm payrolls data for September 2020 missed the forecast of 859K job gains
• US Dollar, gold, and the S&P 500 changed little right after the employment report
• Fiscal stimulus negotiations and Trump catching the coronavirus weighing on markets too

Markets are little changed in response to the latest nonfarm payrolls report. September 2020 NFP data just crossed the wires and showed the US economy added 661K jobs, but the headline figure came in below estimates looking for 859K. One bright spot out of the monthly jobs report is the still-falling unemployment rate, which ticked lower to 7.9% from 8.4% previously.

SEPTEMBER 2020 NONFARM PAYROLLS DATA

Chart Source: DailyFX Economic Calendar

That said, the lower unemployment rate could be driven in part by a lower labor force participation rate as workers grow discouraged amid mass job displacement due to the coronavirus lockdown earlier this year. Nonfarm payrolls data also revealed that employee compensation has slowed as indicated by average hourly earnings.

While nonfarm payrolls data is a closely watched economic release with potential of weighing materially on markets, this month’s NFP report seems to be taking the back seat due to other fundamental drivers like fiscal stimulus negotiations and US President Trump testing positive for COVID-19.

US DOLLAR INDEX PRICE CHART: 5-MINUTE TIME FRAME (02 OCTOBER 2020 INTRADAY)

Chart created by @RichDvorakFX with TradingView

The US Dollar probed intraday lows in the wake of the September NFP report, but as FX traders digested the employment data, the DXY Index subsequently turned higher. USD price action is trading broadly mixed, however, with the US Dollar strengthening against the Euro, Australian Dollar and Canadian Dollar while weakening against the Yen and Pound Sterling. The broader US Dollar could stay in demand with market volatility and risk aversion accelerating, but the 94.00-price level on the DXY Index stands out as an intermittent zone of technical resistance.

GOLD PRICE CHART: 5-MINUTE TIME FRAME (02 OCTOBER 2020 INTRADAY)

Chart created by @RichDvorakFX with TradingView

Gold price action changed very little in response to the September NFP report. The precious metal nevertheless trades on its front foot by advancing about 0.2% intraday and could be explained by its posturing as a popular safe-haven asset. That said, if US Dollar strength ramps up later in the session, gold prices could struggle to hold onto recent gains.

S&P 500 INDEX PRICE CHART: 5-MINUTE TIME FRAME (02 OCTOBER 2020 INTRADAY)

Chart created by @RichDvorakFX with TradingView

As for stocks, S&P 500 Index futures are pointing to a sharp drop at the New York opening bell. S&P 500 price action has been under pressure since late Wednesday on the back of failed stimulus talks. Stock market selling pressure then ramped further overnight owing to news that President Trump has the coronavirus, which looks to be the dominating driver of trader sentiment at the moment.

-- Written by Rich Dvorak, Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight