Enda Curran: Despite weaker-than-expected non-farm payroll data, the Fed may be secretly pleased.
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The unexpectedly weak non-farm payrolls data dampened expectations of an interest rate hike, causing US Treasury yields to fall.
According to Odaily Odaily, a weaker-than-expected non-farm payroll report prompted traders to lower their expectations for Federal Reserve rate hikes in the coming months, causing U.S. Treasury bonds to rise. The yield on the two-year Treasury note, which is most sensitive to changes in monetary policy, fell 6 basis points to 4.11%, while the yield on the 10-year Treasury note fell 2 basis points to 4.46%. Federal Reserve interest rate swaps indicate that traders see 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 is pricing in fewer than two rate hikes of 25 basis points each by March 2027. (Jinshi)
U.S. nonfarm payrolls increased by 57,000 in June, below the expected 110,000.
According to BlockBeats, on July 2nd, the US June seasonally adjusted non-farm payrolls increased by 57,000, below the expected 110,000 and the previous figure revised from 172,000 to 129,000. (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)
Analysis: The US non-farm payroll report was surprising; the World Cup failed to boost employment.
According to BlockBeats, on July 2nd, Investinglive analyst Adam Button reported that U.S. nonfarm payrolls increased by 57,000 in June, lower than the expected 110,000. This report was disappointing. While the unemployment rate fell to 4.2%, which seems positive on the surface, the labor force participation rate declined by 0.3 percentage points. Specifically, considering the impact of the World Cup, the 55,000 decrease in the accommodation/food service industry was truly unexpected. This is contrary to expectations and economists' model predictions.
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)