US stocks sold off yesterday after a strong Nvidia-fueled open. That’s a sign of a frothy market where investors sell into strength, not chasing it. Treasury yields slipped across the curve as a December Fed funds rate cut remains in play despite September’s jobs gain overshoot. USD is consolidating above its 200-day moving average, BBH FX analysts report.

US private sector jobs show strength

"The US S&P Global November PMI is today’s data highlight (2:45pm London, 9:45am New York). The composite PMI is expected at 54.5 vs. 54.6 in October, underscoring US private sector growth edge over other major economies. That can offer USD additional near-term support."

"The US nonfarm payrolls (NFP) report for September was good but remains consistent with a soft labor market backdrop. On the positive side labor demand recovered sharply ahead of the government shutdown. NFP surged 119k (consensus: 51k) vs. -4k in August (revised down from +22k). Private sector payrolls, a better indication of the underlying momentum in the labor market, printed at 97k (consensus: 65k) vs. 18k in August (revised down from +38k)."

"On the downside, excluding the non-cyclical health care and social assistance sector, the economy added just 6k jobs on average in July, August, and September. Indeed, Philadelphia Fed President Anna Paulson cautioned yesterday that 'historically, when job gains are concentrated in acyclical sectors like healthcare, that is a precursor to a slowdown'."