The unexpectedly weak non-farm payrolls data dampened expectations of an interest rate hike, causing US Treasury yields to fall.
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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)
Non-farm payrolls data fell short of expectations, prompting markets to bet on a rate hike being delayed until the end of the year.
According to Odaily Odaily, U.S. nonfarm payroll data for June showed that despite a decline in the unemployment rate, hiring activity slowed significantly in June, dampening the initial momentum of job growth this year. Data released Thursday by the U.S. Bureau of Labor Statistics showed that nonfarm payrolls increased by 57,000 in June (market expectations were 110,000) after a downward revision of 74,000 jobs to the previous two months last month. The decline in the unemployment rate is due to a significant drop in the labor force participation rate—when the labor force participation rate declines, it means that some people have left the labor market (e.g., giving up job hunting, retiring early, returning to school, etc.). These people are no longer counted in the "unemployed" population or the "labor force," thus leading to a decrease in the unemployment rate. Following the data release, spot gold rose briefly, and the market reduced its bets on a Federal Reserve rate hike. The market has fully priced in a December rate hike by the Fed, previously expecting an October hike. (Golden Ten)
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)
Enda Curran: Despite weaker-than-expected non-farm payroll data, the Fed may be secretly pleased.
According to ChainCatcher, citing Jinshi, analyst Enda Curran stated that despite the weaker-than-expected non-farm payroll data, the labor market has still improved compared to last year. He believes that given the decline in oil prices and signs of stabilization in the job market, the Federal Reserve may be satisfied with the results.
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.
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)