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Today’s US jobs report was the first of the four major releases before the Fed’s next meeting in September. As it turned out, this was a pretty bad report and as a result, the odds of a September rate hike fell to around 44% from north of 55% before the data was released.
Today's nonfarm payrolls report could swing September Fed hike expectations and determine whether the US dollar extends its rebound or resumes its broader downtrend.
Ahead of today’s jobs data we had already seen some weakness in USD, driven by suspected Japanese intervention in the USD/JPY pair. The dollar had also eased after Kevin Warsh said inflation risks had eased. But he was also happy to let incoming data drive market expectations and keep policy debate for FOMC meetings. Thus, a lot was hinging on this US jobs report for market direction. Well, as it turned out, the data was disappointing, but not a gamer changer.
Today looks to be the most important of the week for much of the financial markets. The US dollar eased lower amid potential intervention by Japan, while US stock futures traded mixed with ahead of today’s closely watched non-farm payrolls report. Investors were reluctant to take on fresh risk before one of the month’s most important economic releases, and ahead of a long weekend for US investors.
A bullish wedge keeps upside in focus, but markets may be more sensitive to weak US labour market data than another upside payrolls surprise.
Traders are pricing in an outside shot of a Q3 rate hike by the Fed - will this month's NFP report dash those hopes?
The US dollar was already down on the day when the US jobs report was released. It then fell further as traders reacted to the rise in the unemployment rate to its highest level since 2021, even if the headline jobs growth beat expectations slightly. Still, the jobs report was not as bad as some had feared, and this limited the impact of the data.
As well as US non-farm payrolls report, we will have key central bank rate decisions to look forward to, including from the UK, putting the GBP/USD forecast into focus heading into the final weeks of 2025.
The much stronger non-farm payrolls data means a July rate cut is now no longer in consideration, which is music to stock market bulls' ears. But with the July 9 tariff deadline looming next week, can stocks retain their gains ahead of the long weekend?
Non-farm payrolls data releases are influential on both economic policy and financial markets. Discover what non-farm payrolls are, the upcoming NFP dates for 2024 and how you can trade them.
