US September payrolls came in far below forecast, cutting the odds of a Fed hike on 28 Oct to about 22%, yet gold still failed to break $4,200 because the 10-year yield remains high. Markets now await the ISM services index at 14:00 GMT.
Updated Mon 5 Oct 2026 · 00:35 GMT · Prices as of the New York close Fri 2 Oct
Key takeaways
- 1NFP Sep came in at 29K, below the 90K forecast; unemployment rose to 4.2% and August was revised down to 133K
- 2Odds of a Fed hike on 28 Oct fell to ~22%, but remain about 87% by December, according to CME FedWatch
- 3DXY closed at 101.90 and gold at $4,140, down 3.4% on the week as the 10-year yield held near 5.28%
- 4Watch ISM services at 14:00 GMT; this week also brings the FOMC minutes (Wed 18:00 GMT) and UMich (Fri 14:00 GMT)
Today’s events · Mon 5 Oct 2026
- Eurozone services PMI (final)Forecast 53.0 · Flash 53.0LOW
- Eurozone Sentix investor confidenceForecast 4.5 · Previous 5.1LOW
- US S&P Global services PMIForecast 58.7 · Flash 58.7LOW
- ISM services (Sep)Forecast 55.1 · Previous 55.4Watch the prices paid and employment indexesReleased today at 14:00 GMTHIGH
Market overview
Approximate closing prices from Trading Economics, cross-checked with FXStreet · ▲▼ weekly change 28 Sep–2 Oct
NFP misses badly, but the dollar dips only briefly
On Friday (2 Oct) the US Bureau of Labor Statistics (BLS) reported that nonfarm payrolls rose by just 29K in September, below the 90K forecast. Unemployment edged up to 4.2% from 4.1%, wage growth slowed to 3.0% y/y versus 3.2% expected, and the prior two months were revised down by about 60K combined, with August cut to 133K from 162K, according to FXStreet. The dollar index (DXY) broke below 102 and fell under 101.70 right after the release before recovering to close near 101.90, still up about 0.7% on the week. Read more in our September NFP analysis
Markets scaled back bets on a Fed rate hike at the 28 Oct meeting to about 22%, according to CME FedWatch, but still price roughly 87% odds of a hike by December because inflation remains high. The 10-year Treasury yield therefore stayed near 5.28%. In oil, OPEC+ agreed on Sunday (4 Oct) to keep its November output target unchanged; WTI traded near $89.85 this morning, down about 0.6% after Friday’s close around $91.11.
“Inflation is now a bigger concern than the labor market, and the Fed will not overreact to a single month of data.”
Austan Goolsbee, Chicago Fed President · 2 Oct (paraphrased)
Asset by asset
Gold fails at $4,200 despite weak NFP as yields stay high
Gold touched $4,227 after the jobs data but could not hold above $4,200, closing Friday near $4,140, down about 0.9%, and falling about 3.4% on the week. FXStreet said the 10-year yield near 5.29% weighed on gold more than the labor market news. The next support at $3,996 is the 29 Jul low, while $4,279 is the 100-day moving average. Gold analysis →
Euro rebounds from its yearly low to around 1.1253
EUR/USD dropped to a low near 1.1221 before the NFP release, then bounced as the dollar weakened, though it was still down about 1.0% on the week. Support came from the flash eurozone CPI for September, which accelerated to 3.8% versus 3.6% expected, giving the ECB reason to keep policy tight, but worries over France’s public finances continue to cap demand for the euro.
Yen gains fade quickly after NFP
USD/JPY fell to about 156.95 right after the US jobs data but climbed back to close Friday near 157.67, up about 0.2% on the week, even though Tokyo CPI for September accelerated to 2.7% versus 2.4% expected. FXStreet sees the pair’s gains driven more by yen selling than by dollar buying.
What to watch today
Europe brings the final eurozone services PMI and the Sentix index. The main event is the US ISM services index at 14:00 GMT, forecast 55.1 from 55.4
- FOMC minutes (Sep)Wed 18:00 GMT
- UMich consumer sentimentFri 14:00 GMT
Our view
The much weaker-than-expected NFP reduces the odds of an October Fed hike but does not change the bigger picture, as inflation remains high in both the US and Europe. The dollar dipped only briefly before recovering, while gold, which should have benefited, is still held down by high yields. Today’s ISM services and Wednesday’s FOMC minutes will set the direction.
- 1Watch yields alongsideAs long as the 10-year yield stays near 5.3%, gold and the yen will struggle to recover
- 2Gold still below $4,200Rebounds toward resistance are likely to be sold; key support is $4,100
- 3Be careful around the dataPrices may swing sharply at 14:00 GMT; trade smaller and set a stop-loss on every order
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Sources (12)
- BLS – Employment Situation Sep (2 Oct)
- FXStreet – NFP / DXY (2 Oct)
- FXStreet – Gold / FedWatch (2 Oct)
- FXStreet – Goolsbee (2 Oct)
- FXStreet – EUR/USD / Eurozone CPI (2 Oct)
- FXStreet – USD/JPY (2 Oct)
- FXStreet – AUD/USD / FedWatch (5 Oct)
- FXStreet – OPEC+ (5 Oct)
- Trading Economics – Currencies
- Trading Economics – Commodities
- Trading Economics – US 10Y
- Forex Factory – Calendar 5 Oct (forecasts)
Risk warning: Trading Forex, gold and CFDs carries a high level of risk and you may lose all of your capital. This news is a summary for educational purposes, not investment advice. Prices in this article may have changed by the time you read it.
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