The US Non-Farm Payrolls (NFP) report for September came in very strong this morning. Some highlights: 

• The US added +336k jobs, almost double the +170k consensus
• July & August figures were revised higher by another +119k
• This is the strongest release since January of this year
• The #unemployment rate is unchanged at 3.8% (a drop to 3.7% was expected)
• Average Hourly Earnings YoY drops to 4.2% (unchanged at 4.3% was expected)
• Wage growth is slowest since June of 2021  

Even with wage growth easing, this release is incredibly strong and will put more pressure on the Fed to keep their foot on the gas pedal of rate hikes and/or the "higher for longer" theme. Today's release also makes the US CPI print next Thursday that much more important. In the case of a higher than expected reading, the tandem effect of strong labor market growth and renewed #inflation pressures will likely seal the deal on a more hawkish Fed policy path in the near-term. 

EUR/USD is lower on the day in line with USD strength across the board. German factory orders were stronger than expected while Italian retail sales were weaker than expected, adding pressure to the widening German-Italian bond yield differential.  

USD/CAD has been volatile this morning with the tandem releases of US & Canadian jobs figures. While not on the same scale, Canadian jobs numbers also came in stronger than expected with 64k jobs added versus the 20k expectation. The unemployment rate remained at 5.5% and wage growth increased to 5.3% versus the 5.1% expectation. Spot is marginally lower on the day after initially rising on the blowout US numbers. 

GBP/USD has recovered some of its earlier losses but remains lower on the day in line with most USD-based pairs. UK mortgage lender Halifax released mixed housing data, saying that UK house prices fell for a 6th month but the drop is showing signs of easing. 

USD/MXN is higher on the day extending its weeklong slide to about 5% as one of the world’s best carry trades appears to show some signs of unwinding. This comes on the heels of a unilateral move by President Lopez Obrador yesterday to change how air travel services are rendered by the nation’s airports, including passenger fees, airport service costs, and leasing agreements. This move sent Mexican markets much lower yesterday. 

USD/BRL is higher on the day as the increased likelihood of higher US interest rates puts pressure on the Real. There has been talk that policymakers in Sao Paulo are concerned about having to slow down the rate cuts that were planned to continue through the end of the year in response to US policy.