#SP500 LDN TRADING UPDATE 10/01/25

WEEKLY BULL BEAR ZONE 6050/60

WEEKLY RANGE RES 6077 SUP 5911

DAILY BULL BEAR ZONE 5965/75

DAILY RANGE RES 5996 RANGE SUP 5913

BUYER ON TEST/REJECT WEEKLY/DAILY RANGE SUP TARGET DAILY BULL BEAR ZONE

BUYER ON ACCEPTANCE ABOVE DAILY BULL BEAR ZONE TARGET DAILY RANGE RES

SELLER BELOW 5900 TARGET 5865> *5820* CORRECTIVE OBJECTIVE AGAINST 6107 SWING HIGH

YOU CAN REVIEW THE WEEKLY ACTION AREAS AND PRICE OBJECTIVES HERE

Goldman Sachs Trading Desk Views

What are the potential risks associated with material seasonal distortions in this Friday’s Payroll Report? How will macromarkets respond? This is a significant print for the market: the recent adjustments in rates and FX (fewer cuts, stronger USD) reflect the belief that the economy will remain resilient at current policy rates and that the neutral rate is higher. We maintain that this repricing should be sustainable; however, the labor market, being the most directly linked to the Fed’s goal of maximum employment, poses the clearest fundamental downside risk to this perspective (Cahill).

GIR anticipates a headline figure below consensus at 125k (consensus is 163k) and expects the U3 unemployment rate to rise slightly to 4.3%, despite annual seasonal factor revisions. Other surveys suggest that job seekers have encountered more significant challenges in recent months, and the above-normal growth in labor supply from increased immigration is likely to be tapering off.

Markets: FX: There is an asymmetry favoring a stronger USD on a positive surprise. If the report exceeds expectations, hedge funds may feel underexposed, and Real Money could ramp up EURUSD selling strategies initiated on January 2nd, while US Corporates may enhance their hedging programs, leading to the USD reaching new cycle highs against G10 currencies, negatively affecting EMFX. Conversely, if the report falls short, any immediate reaction of a weaker USD or stronger EMFX is expected to be short-lived, as USD demand returned within 30 minutes of the last 2-3 Payroll reports. The market has already reduced a significant amount of USD length in recent days, and maintaining long USD positions remains one of the few high-conviction themes for Q1. We believe that retesting this week’s lows in the USD (EURUSD 1.0450, DXY 107.85, USDCNH 7.3150, USDZAR 18.4500, USDMXN 20.2500) will present an opportunity to re-engage or add to core USD length for the post-Inauguration period and Q1 (Brauten-Smith, Stewart).

FX Gamma appears fairly priced, and we prefer Mon-Tues GBPUSD Calls to hedge core USD length.

Rates: The 2025 FOMC pricing is expected to be the most sensitive to Friday’s Unemployment Rate. It’s important to note the December SEP distribution of 2025 UER projections: three participants revised their year-end forecasts down from the 4.4-4.5 range to 4.2-4.3, with 13 dot plot submitters in the 4.2-4.3 range and 14 in the two or fewer cuts camp. Any print of 4.4% UER in the coming months (even rounded) could quickly lead the market to extrapolate December’s information set to a baseline of three cuts (Bingham).

Equities: The most positive reaction for equities would come from a print aligning with GS forecasts; the risk to equities lies in any developments that push us back toward the higher-for-longer narrative.