Markets digested delayed U.S. employment data distorted by October’s government shutdown on Tuesday, with equities declining for a third consecutive session while traders maintained cautious positioning ahead of cleaner December data expected in early January.
Check out the forex news and economic updates you may have missed in the latest trading session!
Forex News Headlines & Data:
- New Zealand Food Price Index for November 2025: 4.4% (4.5% forecast; 4.7% previous)
- Australia S&P Global Services PMI Flash for December 2025: 51.0 (53.0 forecast; 52.8 previous)
- Australia Westpac Consumer Confidence Change for December 2025: -9.0% (0.2% forecast; 12.8% previous)
- Japan S&P Global Manufacturing PMI Flash for December 2025: 49.7 (49.5 forecast; 48.7 previous)
- Japan S&P Global Services PMI Flash for December 2025: 52.5 (51.6 forecast; 53.2 previous)
- U.K. Employment Change for October 2025: -16.0k (-60.0k forecast; -22.0k previous)
- U.K. Unemployment Rate for October 2025: 5.1% (5.1% forecast; 5.0% previous)
- U.K. S&P Global Services PMI Flash for December 2025: 52.1 (52.0 forecast; 51.3 previous)
- U.K. S&P Global Manufacturing PMI Flash for December 2025: 51.2 (51.2 forecast; 50.2 previous)
- Euro area HCOB Manufacturing PMI Flash for December 2025: 49.2 (50.1 forecast; 49.6 previous)
- Euro area HCOB Services PMI Flash for December 2025: 52.6 (53.8 forecast; 53.6 previous)
- Euro area ZEW Economic Sentiment Index for December 2025: 33.7 (25.5 forecast; 25.0 previous)
- Euro area Trade Balance for October 2025: 18.4B (14.1B forecast; 19.4B previous)
- U.S. Nonfarm Payrolls for November 2025: 64.0k (25.0k forecast; 119.0k previous)
- U.S. Unemployment Rate for November 2025: 4.6% (4.6% forecast; 4.4% previous)
- U.S. Retail Sales for October 2025: 0.0% m/m (0.2% m/m forecast; 0.2% m/m previous); 3.5% y/y (2.7% y/y forecast; 4.3% y/y previous)
- Fed’s Bostic said on Tuesday that inflation is still the more pressing risk; he favored holding rates unchanged and recommended keeping them level through 2026
Broad Market Price Action:
Tuesday’s session reflected uncertainty as traders interpreted delayed U.S. employment data that Federal Reserve officials have already indicated they’ll likely look through due to October’s 43-day government shutdown distortions.
Equity markets extended their recent decline, with the S&P 500 falling for a third consecutive session to close around 6,793, down 0.38% on the day. The index weakened following the U.S. employment data release, possibly reflecting concerns about mixed labor market signals despite Fed Chair Powell’s characterization of jobs data being affected by the longest government shutdown in U.S. history. Multiple Fed officials and strategists have noted the October data in particular—showing a 105,000 payroll decline largely driven by a 157,000 contraction in government employment—appears too noisy for meaningful policy conclusions.
WTI crude oil suffered the session’s steepest losses, declining 2.29% to settle near $55.00 per barrel. The drop appeared to correlate with broader risk-off sentiment and possibly demand concerns, though there were no specific oil-related catalysts during the trading day to directly explain the magnitude of the move.
Gold edged modestly lower, declining 0.07% to trade around $4,302, with profit-taking possibly emerging after the precious metal’s recent strength. The subdued move suggested cautious positioning ahead of December’s cleaner employment data expected in early January.
Bitcoin rallied strongly, climbing 1.63% to trade near $87,620, marking the day’s best performance among major assets. The cryptocurrency’s strength appeared disconnected from traditional market drivers, possibly reflecting a technical rebound from relatively oversold conditions, and/or its growing role as an alternative asset during periods of economic data uncertainty and ongoing discussions about fiscal policy.
Treasury yields declined, with the 10-year yield falling approximately 7 basis points to around 4.10%. The bond market move likely correlated with the rising unemployment rate reaching 4.6%—the highest since 2021—reinforcing expectations that the Fed will maintain its cautious approach to policy adjustments despite three rate cuts already delivered in 2025.
FX Market Behavior: U.S. Dollar vs. Majors
The U.S. dollar traded choppy and mixed throughout Tuesday, closing with a net bearish lean against major currencies, likely a reaction to noisy U.S. employment data showing a softening labor market.
During the Asian session, the dollar traded with arguably a net bullish lean, possibly reflecting overnight positioning as traders awaited the delayed U.S. jobs data. The moves were choppy and mixed across currency pairs, with no significant regional catalysts driving clear directional momentum.
The London session brought an arguably net bearish shift for the dollar. European session data came in heavy, led by the UK labor market report. It showed unemployment ticking higher to 5.1% from 5.0% as expected, with payrolls declining once again, yet wage growth surprised to the upside. The pound strengthened on a slightly hawkish repricing as total easing expected for 2026 pulled back from 64 bps to 56 bps. The euro-area Composite PMI slipped to 51.9 from 52.8 in November, with Germany’s industrial sector unexpectedly deteriorating, yet the dollar failed to capitalize meaningfully on European weakness, suggesting broader dollar softness was the dominant force.
The U.S. session saw the dollar continue its net bearish trajectory early on following the delayed employment data release, before recovering slightly to trade choppy and sideways for the remainder of the session. The November payrolls figure of 64,000 came in above the 25,000 forecast, while October’s reading was revised sharply lower to -105,000 from 119,000, with government payrolls contracting by 157,000 versus the -35,000 forecast—reflecting the effects of the 43-day government shutdown from October 1 to November 12, 2025–the longest government shutdown in U.S. history.
Despite the mixed employment data, the dollar’s weakness appeared to reflect market positioning that aligned with several Fed officials’ and strategists’ assessments that the October/November data is too distorted by the shutdown to meaningfully inform near-term policy decisions. Fed’s Bostic said he continues to view price stability as the clearer and more pressing risk and expects inflation to remain above 2.5% even at the end of 2026, though his hawkish stance didn’t prevent the dollar’s modest decline.
At Tuesday’s close, the dollar traded mixed but arguably net bearish against major currencies, with traders likely positioning for December’s employment report—expected in early January—which should provide cleaner signals for Fed policy trajectory.
Upcoming Potential Catalysts on the Economic Calendar
- Japan Machinery Orders for October 2025 at 11:50 pm GMT
- Japan Balance of Trade for November 2025 at 11:50 pm GMT
- Australia Westpac Leading Index for November 2025 at 12:00 am GMT
- U.K. Inflation Updates for November 2025 at 7:00 am GMT
- Germany Ifo Business Climate for December 2025 at 9:00 am GMT
- Euro area Wage Growth for September 30, 2025 at 10:00 am GMT
- Euro area Inflation Rate Final for November 2025 at 10:00 am GMT
- U.K. CBI Industrial Trends Orders for December 2025 at 11:00 am GMT
- U.S. MBA 30-Year Mortgage Rate & Applications for December 12, 2025 at 12:00 pm GMT
- U.S. MBA Mortgage Applications for December 12, 2025 at 12:00 pm GMT
- U.S. Fed Waller Speech at 1:15 pm GMT
- Canada Foreign Securities Purchases for October 2025 at 1:30 pm GMT
- Swiss SNB Quarterly Bulletin at 2:00 pm GMT
- U.S. Fed Williams Speech at 2:05 pm GMT
- U.S. EIA Crude Oil Stocks Change for December 12, 2025 at 3:30 pm GMT
- U.S. Fed Bostic Speech at 5:30 pm GMT
Wednesday’s calendar features UK inflation data that could influence Bank of England rate cut expectations following Tuesday’s stronger-than-expected wage growth, while Germany’s Ifo Business Climate may provide further insight into European economic momentum after disappointing manufacturing PMI readings. Multiple Fed speakers—including Waller, Williams, and Bostic—could offer clarification on how policymakers are interpreting the distorted October/November employment data and whether December’s cleaner report will drive the next policy move.
Markets remain sensitive to any fresh commentary on the balance between inflation persistence and labor market cooling, particularly following Tuesday’s mixed signals from the delayed jobs data that most analysts expect the Fed to look through.
Stay frosty out there, forex friends, and don’t forget to check out our Forex Correlation Calculator when planning to take on risk!
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