Markets enter today’s NFP release pricing with very little chance of any further hikes (8 bps) and placing the first rate cut in May 2024. This market positioning leaves non-negligible room for repricing in either direction (pricing in a hike before year-end, bringing forward the first cut), so out-of-consensus NFP prints should trigger sizeable directional moves in USD crosses. 

Incidentally, elevated volatility in longer-dated yields should see that part of the curve move quite sharply after the release, and continue to be a factor for FX today. Still, once the fiscal and bond supply factors dissipate, hard data are what investors will be left with, and what can dictate moves beyond the very near term.