There was some degree of confusion last Friday as Non-Farm Payrolls hit the newswires. The publication was a mixed bag overall. Not great, not terrible. 142k jobs were added in August, which fell short of expectations of 160k, but the unemployment rate fell to 4.2% compared to 4.3% in July. Figures from previous months were once again revised to the downside, making the August tally seem better in comparison. Historically the August figure is often revised to the upside further down the line, so the actual number may in fact have beaten expectations.
Either way, US indices took the news badly. The Nasdaq Composite crashed 2.5% on Friday, a dismal day to end a woeful week – its worst in well over a year. The S&P 500 and Dow Jones weren’t far behind with 1.7% and 1% drops respectively. The Dollar followed an interesting pattern over the course of the day, initially plummeting following the release of the NFP data, only to claw itself back into the black by the closing bell. Interest rate odds followed a similar shift in sentiment, firstly gravitating towards a 50 bps cut, only to swing back in favour of a mere 25 bps cut by the end of the day. At the time of writing, a quarter percent cut is priced at 70% - higher than before the NFP release.
It is unclear how many layers of assumptions are in play at the moment. Poor employment figures may well provoke the Fed into more aggressive rate cuts in the near future and such a promise of increased liquidity would benefit asset prices in general. This has been the play for much of this year, but now the dynamics could be getting simpler. Bad news may just be bad news and the 4D chess games are over.
Cảnh báo rủi ro : Giao dịch các sản phẩm phái sinh và đòn bẩy có mức độ rủi ro cao.
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