US NFP report: Job gains rebounded nicely in November

The dollar has sold-off against its peers this afternoon, as investors see today’s payrolls report as insufficiently strong enough to prevent a December rate cut from the Federal Reserve.

Job gains rebounded nicely in November following the hurricane-induced slowdown in hiring in the month prior, with wage gains also remaining pinned above 4% on an annual basis. The unemployment rate ticked upwards, however, which, while expected, may have been enough to trigger the adverse reaction in the dollar. Following today’s data, markets are doubling down on bets that the Federal Reserve will cut interest rates again at the December FOMC meeting - this is now roughly 90% priced in by futures.

While we don’t think that the Fed will disappoint investors, we suspect that the communications will strike a hawkish tone, not least in anticipation of the inflationary policies under Trump 2.0. We could also see an upward revision to the ‘dot plot’, indicating that Fed officials see a more gradual pace of cuts in 2025 than had been previously anticipated.