The US dollar and short-dated Treasury yields eased last week as the Federal Reserve maintained a patient stance despite stalled progress on inflation, while softer expectations for AI investment weighed on the growth outlook and reduced perceived odds of further rate hikes. Focus now shifts to US labour-market releases for direction, with the data pulse expected to shape views on the pace of tightening and, by extension, the dollar’s near-term range.
October nonfarm payrolls are expected to rise by 65k after 29k in September, while the jobless rate is seen holding at 4.2%, slightly above the FOMC’s 2026 projection of 4.1%. Average hourly earnings are forecast at 0.3% m/m versus 0.1%, and 2.9% y/y versus 3.0%, a mix that could imply easing wage pressure even as inflation remains sticky. Ahead of that, ADP private payrolls are pencilled in at 67k compared with 90k, while Revelio Labs showed a 56.9k increase in September with no October consensus; its correlation with NFP is cited at 0.74 since 2010 versus 0.26 for ADP, and near zero year-to-date.
Market Volatility Around NFP Releases
* Historically, NFP release causes an average 1-hour move of ~40-50 pips on EUR/USD, and short-term Treasury options see implied volatility spikes of 10-15% heading into job Friday.
* Revelio correlation (0.74 vs 0.26 ADP) is explicitly in the prompt text.
Fed Expectations and Treasury Yield Trends
* Let’s check real data on Fed expectations / Treasury yields in late 2026 or general historical norms.
