Analysis: The US non-farm payroll report was surprising; the World Cup failed to boost employment.
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Analysis: Non-farm payroll data weakened but still showed growth; the Fed's decision to hold rates steady was reassessed.
Odaily Odaily analyst Eric Merlis stated, "June non-farm payrolls significantly missed expectations, a stark contrast to the series of upward surprises earlier this year. However, the labor market continues to create jobs, and wage growth has shown little sign of acceleration." "With a weakening labor force participation rate and cooling hiring, the Fed's decision last month to hold rates steady no longer appears as a policy mistake, but rather a cautious and patient approach. Meanwhile, the market is repricing: as inflation discussions continue, the likelihood of future rate hikes is decreasing." (Jinshi)
Analysis: Gold prices were boosted by non-farm payroll data and recent remarks by Warsh.
Gold prices were boosted by weaker-than-expected US non-farm payroll data, rising 2% after a slight dip ahead of the report. Data from the US Odaily of Labor Statistics showed that only 57,000 non-farm jobs were added in June, below analysts' forecasts of 115,000. This unexpected data drove up stock and commodity prices, easing market concerns about future interest rate hikes. Comments from Federal Reserve Chairman Warsh also mitigated market anxieties about interest rates. Silver, the most actively traded commodity, also rose, gaining 4%. (Golden Ten)
Analysis: Weak non-farm payrolls data reduced expectations of a Fed rate hike, leading to a rise in bond prices.
Odaily Odaily reports that U.S. Treasury prices rose following a weaker-than-expected non-farm payroll report, as traders lowered their expectations for Federal Reserve rate hikes in the coming months. The yield on the two-year Treasury note, most sensitive to monetary policy changes, fell 6 basis points to 4.11%, while the yield on the 10-year Treasury note fell 2 basis points to 4.46%. Interest rate swap data shows that the market expects about a 20% chance of a rate hike at the Fed's meeting later this month, down from 33% before the data release. The market expects the Federal Reserve to raise interest rates fewer than twice by March 2027, with each increase not exceeding 25 basis points. Non-farm payrolls increased by 57,000 last month, after the figures for the previous two months were revised downwards, while economists surveyed by Bloomberg had expected an increase of 113,000. The unemployment rate fell to 4.2% due to a sharp decline in the labor force participation rate. (Jinshi)
The credibility of US employment data is being questioned; the non-farm payrolls "lifeline": if the increase is below 150,000, the Fed is almost certain not to raise interest rates.
According to Mars Finance, on July 2nd, with the June non-farm payroll report about to be released (moved to Thursday due to the Independence Day holiday), the market is showing significant disagreement regarding the accuracy of current US employment data. From March to May this year, the US averaged 188,000 new jobs per month, marking the strongest hiring cycle in three years. However, industry insiders worry that this figure may be inflated: one-off factors such as favorable spring weather for outdoor employment and temporary work related to the World Cup have pushed up the data, and the spring and summer employment trend often shows a "peak followed by a decline." Analysts point out that June's new jobs need to reach or exceed Wall Street's consensus forecast of 110,000 to confirm the sustainability of the employment recovery. If it significantly exceeds expectations by 150,000 or more, the Federal Reserve might seriously consider raising interest rates at its policy meeting this month; if it falls below this threshold, the Fed will almost certainly maintain interest rates unchanged. Other key observations include: • The unemployment rate is expected to remain at 4.3%, unchanged for the fourth consecutive month and still at a historically low level; • Recruitment is gradually diversifying across industries, moving away from the previous dominance of the healthcare sector; • Year-on-year wage growth is expected to remain around 3.5%, with no significant inflationary pressure yet. Analysts believe that although the labor market is currently recovering, the reliability and sustainability of the data still need further verification from the June non-farm payrolls report.
June non-farm payroll data may be cooler, with the market expecting 110,000 new jobs. The Federal Reserve's policy path is under close scrutiny.
According to BlockBeats, the US will release its June non-farm payrolls report at 8:30 PM Beijing time on July 2nd. The market widely expects 110,000 new non-farm jobs in June, lower than May's 172,000; the unemployment rate is expected to remain at 4.3%, with average hourly earnings rising 0.3% month-over-month. The market is focused on two core issues surrounding the June data: first, whether the job market will continue to tighten after May; and second, whether May's strong performance was affected by one-off factors, particularly the short-term labor demand generated by the World Cup. This will directly impact interest rate expectations. The current stabilization of the US job market has reduced the necessity for the Federal Reserve to continue cutting interest rates. Unlike last year's rate cuts, the financial market currently widely expects the Fed to raise rates sometime this year to address inflationary pressures. However, if the job market unexpectedly weakens, this expectation could quickly reverse. If employment data is stronger than expected, the market may further reduce its expectations for interest rate cuts, or even re-priced in the possibility of rate hikes, putting pressure on highly valued assets such as technology stocks. Conversely, if the data is significantly weak, it may boost expectations for rate cuts, but it will also trigger market concerns about the prospects for US economic growth and corporate profits. The market is also paying close attention to the volatility of assets such as the US dollar, US Treasury yields, and the Japanese yen exchange rate.
The protagonist of ByteDance's stock trading success story: CPI, non-farm payroll data, etc., are not just market noise; he previously suffered a significant drawdown in his Nvidia investment due to ignoring the interest rate hike environment.
According to BlockBeats, on July 5th, Leto Bao, the protagonist of the "ByteDance stock trading 30 million yuan" story, reviewed his journey to a 30 million yuan fortune in the US stock market on Binance Square. He stated that CPI, non-farm payrolls, and Federal Reserve policies are all macroeconomic factors, while earnings season reflects the performance of specific companies or industries, and also reflects changes in the macroeconomy. Leto Bao stated that the CPI (Consumer Price Index) is one of the key indicators monitored by the Federal Reserve. A high CPI usually indicates greater inflationary pressure; a low CPI may reflect deflationary pressure. The Federal Reserve's long-term goal is to maintain inflation at around 2%, which represents a moderate inflationary environment, meaning a slow depreciation of the currency, while investment, consumption, and credit activities are relatively healthy. Non-farm payroll data also influences market judgment. There is a certain correlation between overheated employment and inflation, but the relationship between macroeconomic indicators is complex and not a simple linear deduction. The Federal Reserve is responsible for formulating economic policies related to interest rates and serving the US economy through policy adjustments. Leto Bao believes that CPI, non-farm payrolls, Federal Reserve policies, and earnings season should not be simply dismissed as "noise," but all have some reference value. He mentioned that when he previously invested in Nvidia, he ignored the broader interest rate environment, leading to a significant drawdown in his account. Therefore, macroeconomic factors still need to be incorporated into investment decisions. Leto Bao is a former employee of ByteDance, known as the "ByteDance Stock Investor." He reportedly made substantial profits (around 30 million RMB) by investing in the AI storage sector in the US stock market and subsequently resigned. The story began when he noticed an abnormal price increase when buying hard drives on Pinduoduo, which prompted him to research data storage needs and heavily invest in related stocks.