US Payrolls Rose 162,000 in August, and Markets See a 59% Chance the Fed Raises Rates This Month

US payrolls rose 162,000 in August, far above the roughly 50,000 consensus, with June and July revised up a combined 55,000 and unemployment steady at 4.1% even as the labour force grew by 683,000; two-year yields climbed as much as 8bps and markets now see a 59% chance of a hike this month. Meanwhile the US struck three Iranian crude tankers after the IRGC targeted two US Navy warships, and Iran retaliated against US-linked shipping in the Strait of Hormuz, leaving Brent above $97.

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In Today's Note

The US economy added 162,000 jobs in August, far above every estimate in Bloomberg's survey and the roughly 50,000 consensus, with June and July revised up a combined 55,000 and unemployment steady at 4.1% even as the labour force grew by 683,000. Two-year yields climbed as much as 8bps.
The US military struck three Iranian crude tankers after the IRGC targeted two US Navy warships with ballistic missiles, and Iran retaliated against US-linked shipping in the Strait of Hormuz over the weekend. Brent trades above $97, though Bessent sees $40-50 crude once the conflict ends.

Market Snapshot: Overnight Moves

Macro & Markets

A far stronger-than-expected increase in the number of jobs in the US labour market drove risk assets and short-dated treasury notes lower, as markets boosted their expectations for a Fed rate hike later in the month.
The S&P 500 was unable to secure back-to-back gains and ended Friday’s session down 0.38% while BTC fell nearly 3% to below $80K. Since breaking out in mid-August, it has repeatedly struggled to hold up above $80,000.
US treasury two-year yields, most sensitive to Fed policy, climbed as much as eight basis points, with markets currently seeing a 59% probability of a 25bps rate increase in the FOMC’s next meeting.
AI-related chipmakers and semiconductor firms rallied however around optimism over new AI models. OpenAI for example said it was releasing a new generation of its technology, GPT-6.
That helped push the Philadelphia Semiconductor Sector index up 3.37%.

According to the BLS’s nonfarm payrolls report, the US economy added 162,000 jobs in August, far exceeding all estimates in Bloomberg’s survey of economists and the media expectation of around 50,000.
The report also showed notable upward revisions for both the June and July numbers, with a net extra 55,000 jobs more than were counted initially.
July was upwardly revised to show +21,000 against the previously reported -23,000, while June payrolls were revised up by 11,000 to 20,000.

The broad advance in jobs was led by a rebound in leisure and hospitality employment (+62,000), areas that saw large declines in June and July, as well as local government education where 42,000 jobs were added, after large cuts in July.
That category has historically been volatile however, with many teachers falling off of payrolls in the summer, before returning again as the school year begins.

Manufacturing payrolls rose by the most since 2023, with construction firms adding the most jobs since January. On the other hand, the financial activities and information sectors lost a combined 34,000 positions.
Adding to the strength of the report, the unemployment rate held steady at 4.1% despite the labour force increasing by 683,000.

Following the report, President Trump upped his pressure on the Fed to lower interest rates. In a post on Truth Social, he threatened to end all trade relationships with countries the US has a trade deficit with if the central bank doesn’t act.
“We just got GREAT Numbers on Jobs, the Market should go UP, because our Credit and Economy are better but, as always, for the past 25 years, the Stock Market goes DOWN, because we’re living under False Reality that if things are good, you’ve got to ‘KILL IT’ because of a ‘fear’ of Inflation”, he wrote on his social media platform.

In geopolitics, Trump called the war in Iran “small potatoes”, as part of his latest efforts to downplay the six-month plus long conflict.
His comments came after Vice President JD Vance claimed he would not describe the recent armed hostilities as a “war”, given that major combat operations ended months back.
Trump said, “I call it a military conflict because it’s small potatoes for us. It’s not a big thing. You know, we do intermittent strikes. So I heard what he said, and it was interesting because I think that there’s a lot of truth that we’re not fighting right now.”

Despite his comments, tensions have recently escalated between both sides.
On Saturday, the US military said it launched strikes against three Iranian crude oil tankers in retaliation for the Islamic Revolutionary Guard Corps targeting two US Navy warships with ballistic missiles.
The US Central Command wrote on X that two Iranian tankers were disabled near Kharg Island and one was destroyed in the Gulf of Oman, "Let the message to the IRGC be clear: If you shoot at two of our ships, we will impose an even higher economic cost, taking out three of yours.”
Iran then said on Sunday that it targeted three oil tankers that were travelling an unauthorised route through the Strait of Hormuz as well as a number of other US-linked ships, in retaliation for the American attacks.

Treasury Secretary Scott Bessent said on Friday that oil prices will fall as low as $40 a barrel once the Iran conflict is over.
During an interview with Steve Bannon, Bessent said “We're going to get on the other side of this Iran conflict, and I expect that oil will come down. We're going to be very much oversupplied in the oil market after this. We can see $50, $40 crude maybe, just because there's so much coming online”.
Brent crude is currently trading above $97 a barrel.

DeFi / Web3 / Altcoins / Crypto

President Donald Trump has said his administration wants Hyperliquid, a decentralized perpetual futures exchange, to enter the U.S. in a “fully compliant and legal fashion,” with the CFTC working on a potential regulatory pathway.
One route involves Payward, Kraken’s parent company, and its CFTC-regulated subsidiary Bitnomial offering U.S. customers selected crypto perpetuals linked to Hyperliquid markets, creating a regulated U.S. access layer with KYC, sanctions screening and customer protections rather than opening Hyperliquid’s existing venue directly.
The structure could use Hyperliquid’s technology, liquidity and market design, but regulatory changes involving both the CFTC and SEC may still be required and could take up to a year, according to former SEC senior counsel Ashley Ebersole.

LeBron James teased a partnership with prediction market platform Polymarket, posting a video from the company’s headquarters with the caption “Welcome to Polymarket HQ. Coming soon,” and confirming it was “in partnership with @Polymarket.”
A spokesperson for James said a larger football-focused campaign with Polymarket will launch next week and confirmed that his previous ambassador agreement with DraftKings has expired.

Router Protocol, a Coinbase Ventures-backed cross-chain infrastructure project, will shut down all operations by Sept. 30 after failing to build a sustainable business through commercialization, licensing or acquisition efforts.
As part of the wind-down, Router will permanently burn 303.3M ROUTE tokens, about 30% of the token’s nearly 1B maximum supply, and work with centralized exchanges on separate delisting and withdrawal timelines.
Router cited weak bridging economics, falling demand and capital shifting toward AI, and said it plans to open-source selected technology components after more than four years of development.

Liquid Network, a Bitcoin sidechain developed by Blockstream, paused operations after purported white-hat hackers, ethical hackers who identify security vulnerabilities and typically aim to protect or return affected funds, withdrew roughly 4,000 BTC worth $320M from its federation wallet, representing about 95% of its reported bitcoin reserves.
Liquid said the bitcoin was withdrawn using the SideSwap Peg-out Authorization Key (PAK), although it said the key itself was not compromised and has not yet disclosed the underlying vulnerability, while an onchain message from those responsible stated, “we are whitehats. contact us on chain.”
Blockstream is attempting to contact those responsible and recover the funds, while exchanges have suspended deposits and withdrawals of LBTC, Liquid’s bitcoin-backed token.

This Week's Calendar

This week's macro and crypto calendar, part 1.

This week's macro and crypto calendar, part 2.

Charts of the Day

Figure 1. Block Scholes BTC Risk-Appetite Index (white, left-hand axis) and BTC spot price (orange, right-hand axis).

Figure 2. Block Scholes ETH Risk-Appetite Index (white, left-hand axis) and ETH spot price (purple, right-hand axis).

Figure 3. BTC at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes.

Figure 4. ETH at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes.

Figure 5. BTC 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes.

Figure 6. ETH 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes.

Block Scholes is an FCA-regulated institutional crypto derivatives analytics platform. Live data, IV surfaces, and backtesting available via blockscholes.com.