Financial markets are in the final countdown to the September non-farm payrolls report, the monthly US employment release due out today and one of the most closely watched data points on the economic calendar. For a statistical rundown of the setup, see the companion article Preview: September non-farm payrolls by the numbers, which highlights the seasonal patterns around the print — patterns that could make this release a volatile one.

The non-farm payrolls report is published by the US Bureau of Labor Statistics, typically on the first Friday of the month at 8:30 a.m. ET, and tracks monthly hiring across the US economy alongside the unemployment rate and average hourly earnings. The jobless figure is drawn from a separate household survey, and each release also carries revisions to prior months' estimates. Together, those components offer one of the most timely reads on the state of the US labor market, and wage growth in particular is closely watched for its bearing on Federal Reserve policy.

Rate expectations are finely balanced heading into the release. Fed pricing for this month is down to 7.1 basis points, which maps to 28% — roughly the implied probability of a quarter-point move under standard market convention. For reference, a fully priced quarter-point move would correspond to 25 basis points of pricing. That pricing could swing on today's report, with the wage numbers the particular focus. Yesterday's high prices-paid reading in the manufacturing ISM also briefly captured the market's attention — the index tracks the prices manufacturers report paying for their inputs and is watched as an inflation gauge.

Oil is lower today amid talk of a European reserve release, as Trump tries to arm-twist European leaders into measures that would bolster his chances in the midterms. Broadly, markets are upbeat in the lead-up to the payrolls data, with S&P 500 futures up 0.4%. That optimism is largely a result of lower oil prices, and it is not being helped by a drop in Nike shares following another dismal earnings report from the company.

In foreign exchange, USD/JPY is down 40 pips at 157.64. After the pair's curious move lower yesterday, eyes will turn to the possibility of Japanese intervention as the weekend draws closer — Japanese authorities have a history of stepping into the currency market to counter sharp moves in the yen. Elsewhere, FX moves are small.

With rate pricing this tight and seasonal patterns in play, the wage component looks set to be a key driver of the market's reaction. Headline payrolls, the unemployment rate, and average hourly earnings are all published together at 8:30 a.m. ET, so the release is read as a package rather than a single number.

Good luck to those trading the release.

Source: InvestingLive