The US dollar fell to the lows of the day immediately after the November non-farm payrolls report.

The headline jobs gain was slightly better than expected at +227K compared to +200K and there was an upward revisions to the past two months of data but the market instead focused on the unemployment rate, which rose to 4.2% from 4.1%. That rise also came despite a 0.1 pp fall in the participation rate.

The market had been 70% priced towards a cut on December 18 but that rose to 87% afterwards. The thinking there was that Fed officials were already ‘leaning’ towards a cut and it would have taken a significantly stronger report to dissuade them. The market sees 90 bps of easing priced in next year compared to 82 bps before the report.

USD/JPY is the biggest mover, down to 149.60 from 150.50 before the data.

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