NFP That Could Crash the Market

EUR/USD

Key zone: 1.1650 - 1.1750

Buy: 1.1750 (on a strong positive foundation) ; target 1.1900-1.1950; StopLoss 1.1680

Sell: 1.1620 (on a strong break of 1.1650) ; target 1.1450; StopLoss 1.1680

U.S. economic data over recent weeks has shown unexpected resilience. The September PMI reflected strong growth, weekly jobless claims remain low, durable goods orders exceeded forecasts, and GDP (+3.8%) was revised upward due to stronger consumer spending. However, a stock market collapse would immediately trigger a sharp drop in demand, making the labor market the primary indicator for the Fed’s next policy steps.

Problem 1: Trump’s Policy

The administration’s immigration strategy has become a critical factor pressuring employment. Raising the H-1B visa fee from $215 to $100,000, along with restrictions on issuing driver’s licenses to non-U.S. citizens, reduces the labor supply. This leads to fewer new jobs, cools the housing market, but at the same time accelerates wage growth. And wage acceleration is the Fed’s biggest nightmare.

Problem 2: Quality of NFP Data

The key question is how many new jobs are needed to maintain equilibrium in the labor market. According to Powell, the current monthly increase of 29K is below the “break-even” level, while Barkin estimates the balance range at 0–50K, and other Fed members suggest 50K–70K. Job growth above 70K would reduce the likelihood of further easing in October, while figures above 125K would effectively rule out a rate cut. Inflation data for September will also be decisive. Special focus remains on unemployment: staying at 4.3% or falling lower would confirm the Fed’s view on the negative impact of Trump’s immigration policy.

Problem 3: Shutdown Risk

By Wednesday, Congress must resolve the budget funding issue. Another shutdown could lead to thousands of federal employees being laid off and chaos in labor statistics. The BLS has already warned that in case of a crisis, the October 3 report may not be published. Nevertheless, Trump’s refusal to negotiate with Democrats on the budget, coupled with his warning that layoffs would be “their responsibility,” increases the chances of temporary funding approval until October 1.

So we act wisely and avoid unnecessary risks.

Profits to y’all!