Nonfarm payrolls came in at 0.4% MoM (4.0% YoY) beating estimates of 0.3%. The unemployment rate increased from 4.1% to 4.2% despite the Americans thrown out of work by the hurricane or strikes returning to work. Though the results might muddy the case for a Fed rate cut in December, there was no mistaking the message the algos received from VIX.

continued for members…

ES had been threatening a backtest of its SMA10 after breaking down yesterday, is back in the black.

DXY held its white channel line, even as a 10/20 cross seems imminent after EURUSD’s apparent breakout has stalled. Again, I believe this bump in EURUSD is very unlikely to persist, as Germany and France are both in a world of economic hurt. Oil and gas continue to help the inflation picture, testing recent lows yet again…

…which paves the way for the 10Y to attempt another breakdown of its SMA50 and SMA200.Next week’s CPI print could show higher than expected inflation, making it tougher for the Fed to justify a rate cut on the 18th – two days ahead of the PCE print.

The froth we’re currently seeing is very likely to falter. The big question is whether it’ll defy tradition and occur before the end of the year.

If it waits, I’m fond of this scenario:

GLTA