The latest Non-Farm Payrolls put a serious dent into investor sentiment last Friday. The July figures were bad enough, coming in at just 73k new jobs against expectations of 110k, but revisions on previous months delivered the real death blow. In a shocking correction, June numbers were revised from 147k down to 14k, while May was slashed from 139k to 19k, culminating in a massive revision of quarter of a million fewer jobs. The first question on the minds of many is how did the Bureau of Labour Statistics get the numbers so wrong? The second question is what these numbers mean for the US economy. The commissioner of the BLS has already been fired by president Trump, but the second question remains unanswered. US stocks took the news badly, resulting in a 1.2% loss for the Dow Jones on Friday, while the S&P 500 and Nasdaq Composite fell 1.6% and 2.2% respectively. Stock markets around the world soon followed suit, while Asian markets had to wait for this morning’s open to react. The Dollar erased all gains from earlier in the week while gold took the opportunity to climb 2.2% to $3,362 per ounce.
As expected, the Federal Reserve elected to maintain interest rates on the Dollar at 4.5% during last week’s meeting. In a not-so-expected move, two out of the eleven board members dissented, voting instead for an immediate rate cut. While the dissent has no impact on the overall decision, it is the first time since 1993 that two governors voted against the majority. The decision to maintain high rates has been repeatedly criticised by the Trump administration, but up until now the Fed had always been able to back up their position by pointing to a strong labour market. With the latest NFP report, that position instantly became untenable. FedWatch is now heavily in favour of a rate cut on the 17th of September, with interest rate traders now betting on a 25-bps cut with 80% confidence.
The economic calendar is a veritable ghost town compared to last week’s actioned-packed schedule. With the exception of a rate decision from the Bank of England on Thursday, service PMIs are the only noteworthy events of the week. Earnings are also unlikely to spark much interest. The latest NFP data has challenged a number of narratives and markets will have to wait for the dust to settle before regrouping.
Cảnh báo rủi ro : Giao dịch các sản phẩm phái sinh và đòn bẩy có mức độ rủi ro cao.
MỞ TÀI KHOẢN
