Yesterday, the Bureau of Labour Statistics released its annual non-farm payroll revision, covering the period between March 2024 and March 2025. The report estimated that 911 thousand fewer jobs had been added to the US economy during that time frame than initially stated. Put differently, previous NFP reports overestimated new jobs by 76 thousand per month on average, meaning the slowdown in the US labour market has been going on for far longer than previously thought. Upon hearing of the scale of the revision, VP Vance chimed in with “it’s difficult to overstate how useless BLS data has become”. As if it were needed, the updated NFP figures put further pressure on the Fed to lower rates in a bid to stimulate the US labour market. The odds of a 50-bps cut remain minimal according to FedWatch, so it looks like markets are gearing up for a mere 25-bps during next week’s meeting.
The widely expected rate cut is doing wonders for markets around the world. Gold convincingly broke through $3,600 per ounce on Monday and initially rose even higher during yesterday’s session, reaching towards $3,675 at one point before cooling off for the day. The precious metal is showing renewed vigour once again this morning and is already up half a percent at the time of writing.
The record-breaking streak in bullion prices was matched by stock market gains around the world yesterday. In the US, the Dow Jones, S&P 500 and Nasdaq Composite all closed at record high levels; in Hong Kong, the Hang Seng index reached a new peak and pushes higher still this morning; finally in Japan, the Nikkei 225 broke new ground above 44,000 points during yesterday’s session for the first time in its history.
In cryptocurrencies meanwhile, nothing appears to be happening. Bitcoin remains comfortably above $100k but has shown little inclination to move higher despite the prospect of a rate cut. Bitcoin dominance however is showing signs of weakness, allowing the alt market some breathing room to expand.
US PPI data drops in a few hours, followed by CPI data tomorrow. Neither is expected to show much progress on the inflation front, which remains stubbornly above the Fed’s 2% target. Headline inflation is expected to reach 2.9% according to Thursday’s CPI report but should the actual figure overshoot predictions it may complicate the Fed’s path forward. Should inflation continue to push higher it will no doubt limit the central bank’s willingness to loosen the monetary tap.
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