Analyst: Nonfarm Payrolls Report Cools Market Expectations for a Fed Rate Hike in October

Odaily News: After the release of the U.S. nonfarm payrolls report, market traders reduced their bets on a Federal Reserve rate hike in October. Swap contracts tied to Fed meeting dates show that the market no longer fully prices in a complete rate hike this year.

Mohamed El-Erian, Chief Economic Advisor at Allianz, said the U.S. employment data came in surprisingly: only 29,000 jobs were added in September, the unemployment rate rose to 4.2%, and hourly earnings grew just 0.1% month-over-month. In addition, the July and August figures were revised down by about 60,000 jobs. On the supply side, the labor force participation rate rose to 61.8%, which is a more positive development. Overall, this will further reinforce the impact of recent Fed officials' remarks, namely that market expectations for a Fed rate hike in October are cooling.