The Non-farm payroll data for October fell short of expectations, with a reported figure of 150k jobs created compared to the anticipated 180k. Additionally, the unemployment rate saw a slight increase from 3.8% to 3.9%. Meanwhile, average hourly earnings posted mixed results, showing a year-on-year increase but a slight decrease on a monthly basis.
This data was released following the recent FOMC meeting earlier in last week, during which the Federal Reserve maintained its hawkish stance but expressed concerns about the ongoing tightening, particularly in the context of elevated US yields, and the potential for a change in economic conditions by the end of the year.
Earlier in the week, other labour market indicators, such as the ADP employment change and the JOLTs report, also missed estimates and showed minimal change in job openings. The Fed has been calling for a period of below trend growth and a moderate increase in unemployment to help mitigate inflation.
The recent decline in the bond market may have reached its peak as treasury yields and the value of the dollar are steadily declining. Additionally, Fed funds futures indicate a lower probability of another interest rate hike before the year's end, with potential rate cuts inching closer. Market observers will closely monitor upcoming economic data for any signs of weakness that would support the notion that US interest rates have already reached their peak.
Immediate Market Response:
A Decline in USD, Resulting in Gains for Gold.
US Dollar, 5-Minute Chart
Gold (XAU/USD), 5-Minute Chart
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