NFP Update: The Recovery already started, Stocks and Treasuries soar, Oil’s NFP bounce hits a wall, Gold tanks on robust labor report

US stocks continue to rock and roll after a better than expected nonfarm payroll report suggest the economic recovery already began in May.  It is not often you get the headline number and all the components help paint a positive picture of the economy.  Payrolls unexpectedly showed 2.5 million jobs were created in May. The unemployment rate declined to 13.3% and came in much lower than consensus estimate of 19.0%.     Average hourly earnings fell, which is most likely a reflection lower paying jobs came back.  The average weekly hours rose strongly to 34.7 hours.

This nonfarm payroll report was supposed to provide a baseline on how bad things got and not that the recovery was already taking hold in May.  Now financial markets can move forward and it will be hard to build a case against seeing US stocks return to record high territory.  In the short-term, US equities will continue to ignore extremely high valuations and still grind higher.  Three quarters of S&P 500 companies are technology stocks and non-cyclicals, so the coronavirus impact should be limited even if we see a second wave of new cases.

The dollar got its groove back against the euro and yen following the surprisingly strong nonfarm payroll report.  Treasuries went into freefall with the 10-year yield rising 10.5 basis points to 0.930%.

The Canadian dollar is also shining bright after a surprisingly robust labor report.


The oil price rally went into overdrive after a surprisingly robust US labor market report.  The economic recovery is already happening and that could do wonders for crude consumption.  Earlier crude was climbing higher after OPEC+ signaled everyone is on board with extending supply quotas, with the cheaters promising they will make up their part in the coming months.

WTI crude is now facing massive resistance with the $40 level.  Energy traders are completely aware that many oil producers are itching to bring back production with prices coming back so quickly.  The $45 level is make-or-break for many US shale producers, and it would stun many if the Russians allowed this quick oil price rebound to go much further from here.  The battle for market share will continue over the coming weeks and oil-producing nations will likely see more cheaters emerge with the expected record production cuts.


Gold traders rushed for the exits after they were stunned by the robust nonfarm payroll report.  It will be hard for the Fed to remain extremely accommodative if the world’s largest economy is already in recovery mode.  Gold might not get much more support from the Fed, but geopolitical risks, second wave concerns, and an eventually weaker US dollar should keep the longer-term bullish outlook intact.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.