In briefWhat you need to know
- The US created 162,000 nonfarm jobs in August, against expectations of around 55,000.
- Unemployment held at 4.1%, while wage growth cooled to 3.1% year-on-year.
- The market pared back recession fears, but at the same time priced in greater risk of higher rates.
- MNQ and MES gave back part of Thursday's gains, while gold fell sharply after the report.
- Oil stood out and held onto most of its weekly gain on geopolitical supply risk.
The macro week got its definitive full stop Friday at 2:30pm CET. US nonfarm payrolls rose by 162,000 in August, far above the market's expectation of around 55,000. Unemployment held steady at 4.1%.
The headline number was clearly stronger than the market had prepared for. So were the revisions: July was revised up from a 23,000 decline to a 21,000 gain, while June was revised from 20,000 to 31,000. Average job growth over the past three months is therefore 71,000. That's still moderate, but far better than the picture the market had going into the report.
For the futures market, this was a classic double-edged message. Growth fears eased, but rate fears grew. That's a tough combination for traders following Nasdaq futures, S&P 500 futures, gold futures and interest rate futures.
A strong report with important nuances
The BLS report also showed the labor force participation rate rose from 61.4% to 61.6%, while the average workweek increased to 34.4 hours. The private sector created 127,000 jobs, manufacturing 16,000, and the public sector 35,000.
The growth was concentrated, though. Food services accounted for 59,000 new jobs and local government education for 42,000. The information sector lost 23,000 positions, including in data processing, web hosting and publishing. A strong headline NFP number therefore doesn't mean labor demand is equally strong everywhere.
Wage growth was the most important moderating detail. Average hourly earnings rose 0.3% from July, while the annual rate eased from 3.2% to 3.1%. The report therefore wasn't a pure inflation shock. It showed, above all, that the labor market can withstand a high rate level better than expected.
The week's data built up to the rate surprise
NFP stood in contrast to Wednesday's ADP report, which showed only 38,000 new private-sector jobs. The JOLTS survey showed 7.27 million job openings in July, while hires fell to roughly 5.05 million. Thursday's initial jobless claims held low at 206,000.
The picture through the week was therefore "slow hire, slow fire": companies have been cautious about new hiring, but mass layoffs haven't materialized. Friday's report shifted the balance toward greater resilience.
Activity data pointed the same way. ISM Manufacturing fell from 55.6 to 54.6, but stayed clearly above the growth/contraction line. Even more important was ISM Services, which rose to 55.4. New orders reached 60.9, while the price index stayed very high at 72.6. The combination of solid activity and persistent cost pressure had already made quick rate cuts unlikely, even before NFP.
European data was weaker. Eurozone retail sales fell 0.6% in July, and the UK construction PMI dropped to 44.3, signaling clear contraction. German industrial orders, however, surprised to the upside with 2.5% month-on-month growth.
The market's problem
Strong jobs data isn't automatically good news for index futures when inflation is still too high. The market then has to price in both better growth and a greater probability that rates stay higher for longer.
MNQ and MES lost altitude after NFP
The attached 30-minute charts were taken roughly ten minutes after the release and show the initial reaction, not Friday's closing prices.
MNQ fell from around 29,680 to 29,556 and broke below both VWAP at 29,600 and the 21-period moving average around 29,627. MES fell at the same time to 7,741, below VWAP at 7,756 and the moving average at 7,759. The reaction was biggest in Nasdaq, because richly valued tech stocks are typically most sensitive to higher discount rates.
Still, the move needs to be seen in the context of Thursday's sharp rebound. MNQ had climbed nearly 700 points off the week's low, while MES had recovered from around 7,620. NFP erased some of the gain, but not the entire rebound.
Gold took the rate spike hardest
MGC had the purest macro reaction of all. The contract fell from above 4,520 to 4,435 shortly after NFP, a drop of roughly 1.9%. The price broke clearly below VWAP at 4,507 and the 21-period average at 4,514. RSI fell to around 23, showing very heavy short-term selling pressure, though that isn't a buy signal in itself.
The explanation is classic: a stronger labor market raises the odds that the Federal Reserve holds rates high or tightens further. That lifts real-rate and dollar risk for an asset that pays no yield. Market pricing after the report implied roughly a 65% probability of a rate hike at the September meeting, according to Reuters.
MCL was driven by supply risk
Oil stood out. WTI was headed for a weekly gain of more than eight percent after renewed clashes between the US and Iran and continued uncertainty around shipping through the Strait of Hormuz. On the MCL chart, the contract sat around $90.45 after trading above $93 earlier in the week.
Short term, the picture had weakened: the price sat below VWAP and the 21-period average, both near $91.10-$91.20, with RSI around 39. But unlike gold and the indices, oil held onto most of its weekly gain. Geopolitical supply risk outweighed the effect of higher rates and a potentially stronger dollar.
Norway got support from oil
The Norwegian macro calendar was relatively quiet. The most important new data came from the balance of payments: the current account showed a surplus of NOK 298 billion in the second quarter, while the goods-and-services surplus was NOK 232 billion.
Norway's net foreign assets rose by NOK 3,408 billion to a record NOK 22,825 billion. The increase was largely driven by market gains on foreign securities, a weaker krone and continued net financing — not a sudden acceleration in the mainland economy.
For Norwegian markets, the oil rally cuts both ways. It boosts export revenue and can support the krone, but it also raises global inflation risk. That makes the balancing act harder for both the Federal Reserve and Norges Bank.
Conclusion
The week's conclusion is clear: NFP eased recession fears but didn't give the index market an unconditional green light. As long as growth holds up while oil and services prices keep pressuring inflation, good economic news can still turn into bad rate news for MNQ, MES and gold.
For active traders, that means the reaction after the data matters more than the headline alone. When rates, the dollar, gold and index futures all point the same way, the move can gain real force. When the signals diverge, it's often better to cut size and wait for the market to find a new balance.
Risk note
This is general market commentary, not personal investment advice. Futures are leveraged instruments carrying a high level of risk and are not suitable for everyone.