JULY JOBS REPORT TALKING POINTS:
- U.S. employers add 528,000 payrolls in July, well above expectations of a gain of 250,000 jobs. The unemployment rate falls to 3.5%, as the labor market tightens
- Average hourly earnings rise 0.5% month-over-month, keeping the annual rate at 5.2%
- July U.S. inflation data will steal the spotlight next week
Most Read: Bitcoin (BTC), Ethereum (ETH) Latest – Time for Volatility to Pick Up [1]
Updated at 9:10 am ET
MARKET REACTION TO NFP[2] DATA
Immediately after the U.S. employment report crossed the wires, Treasury rates spiked higher on bets that the Fed will continue raising borrowing costs aggressively to cool demand and tame rampant inflationary forces.
Moves in bond yields spooked investors, prompting stocks to turn lower and erase pre-market gains. S&P 500[3] futures, for instance, wiped out a 0.10% advance and fell as much as 1% following the NFP release.
Traders clearly interpreted the good news on the economic front as bad news for monetary policy. Incredibly tight labor market may prevent policymakers from pivoting to a more dovish stance, an outcome Wall Street[4] was looking for.
While strong hiring conditions may lead the Fed to press ahead with plans to front-load hikes, they should ease worries that the economy is headed off the cliff. This may help stabilize risk appetite in the near term.
S&P 500 FUTURES VS US TREASURY YIELDS
Source: TradingView[5]
Original post at 8:40 pm ET
U.S. employers continued to hire at a robust pace[6] at the start of the third quarter for an economy navigating challenging waters and at the late stage of the business cycle, a sign that doom and gloom predictions may be out
