Highest employment growth since March renews expectations for a Fed rate hike in September The price of gold dropped by about $80 per ounce to levels below $4,400 per ounce in the initial reaction following strong NFP data. The better-than-expected reading triggered an immediate strengthening of the US dollar and a rise in US Treasury yields.

• Strong impulse from the US: Nonfarm payrolls (NFP) increased by 162k in August against a forecast of 55k, while the unemployment rate held steady at 4.1%.
• Return of rate concerns: A surprisingly resilient labor market sparked speculation that the Federal Reserve might be forced to raise interest rates further.
• Reaction of other assets: The EURUSD pair immediately fell below 1.16, the 10-year US Treasury yield jumped to 4.79%, and US stock indices opened under selling pressure.

Strong US data shows not only huge employment growth, but also a positive revision of previous data. Wage growth fell slightly to 3.1%, but some forecasts pointed to 3.0% YoY. The unemployment rate stayed at 4.1%.

Gold quickly erases all gains from Thursday’s session. Similarly, we are observing a sharp drop in TNOTE. Comments from Fed members will be crucial regarding how to interpret this data. It is worth emphasizing that next Friday we will learn US CPI inflation, which could provide a final picture regarding the prospects for US interest rates.