US Nonfarm Payrolls surge to 165,000, boosting rate hike expectations

The US Labor Department reported that nonfarm payroll employment increased by 165,000 in October, significantly exceeding economist forecasts of approximately 62,000 to 65,000. The unemployment rate also edged down to 4.1% from 4.2% in September.

This stronger-than-expected jobs data has fueled market expectations for a 25-basis-point interest rate hike by the Federal Reserve in December, with some estimates rising to nearly 80%. Consequently, the US dollar index saw a significant surge, rising 0.77% to 102.26, marking its largest single-day percentage gain since mid-June.

In response to the report, US Treasury yields moved higher, with the 10-year yield rising to 4.85% and the 2-year yield reaching 4.52%. Major currencies reacted sharply, with the euro falling 0.67% to $1.11437 and the British pound dropping 0.71% to $1.3355.