? U.S. October Nonfarm Payrolls surprises at 271K vs. 185K expected

? U.S. hourly wages rise to 2.5% Year over Year

? USD strengthens vs. major currencies on hawkish Fed expectations

? S&P500 climbs to highest since July

The much anticipated U.S. Nonfarm Payrolls for October was published at 271K jobs last Friday, strongly outperforming the analyst consensus of 185K and significantly improving over September’s modest 142K jobs figure. It was further published that U.S. Unemployment continued to decrease. This time it went from 5.1% to 5%, which is the first time since 2008 when U.S. unemployment was so low. Additionally, the diminishing of supply, as articulated by decreasing unemployment, also translated to signs of rising wages, with average hourly wages’ annual rate of increase climbing to 2.5%.

U.S short term government bond yields, which move inversely to their price, have climbed sharply on the news, pricing in higher expectations for a rate hike by the Fed in its upcoming, December, meeting. The probability derived from the U.S. bond market for a December liftoff surged to over 70%, from about 56% before the release. Response at the U.S. equity pre-market open was initially quite negative, seeing E-Mini contracts on the S&P500 lose about 0.6% on expectations that the U.S. monetary policy is due to be less accommodative in the near future. As the U.S. daily trading session progressed, however, it saw stocks gradually recover from the negative sentiment. The S&P500 ended the daily trading session with a mere 0.03% loss.

Significant losses were seen in gold price, which dropped some 2% on the news, touching USD 1085.56 per oz. Much of this, however, can be interpreted, rather, as the greenback strengthening. The Dollar Index, an average of exchange rates between the USD and major currencies, added over a percentage point on the news. This was comprised of EUR/USD losing some 1.2%, USD/JPY adding about 0.7% and GBP/USD decreasing about 0.7%.