Now Reading: US jobs data dashes Fed hike bets, bonds see best run since May
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US jobs data dashes Fed hike bets, bonds see best run since May
US Treasuries posted their biggest weekly rally in short-term maturities since May after data showed employers unexpectedly shed 23,000 jobs in July. Economists had forecast 80,000 additions. Two-year yields fell to 4.19%…
The Story in Brief
US Treasuries posted their biggest weekly rally in short-term maturities since May after data showed employers unexpectedly shed 23,000 jobs in July. Economists had forecast 80,000 additions. Two-year yields fell to 4.19% and 10-year yields dropped to 4.65%, their first weekly decline in three. Traders cut September Fed hike odds to 44% from 55% before the report.
The July nonfarm payrolls drop followed downward revisions to prior months, pointing to a cooling labour market despite the unemployment rate easing to 4.1%. Fed funds futures still price 77% odds of a hike by December. The Labour Department report precedes next week's $125 billion Treasury auctions and July CPI data. Some analysts caution against reading too much into one volatile report.
The Indian Opinion
Market chatter focuses on one weak payrolls number while ignoring that the Fed has already signalled a pause. The report is noisy and reflects revisions, not a collapse. Remember, unemployment fell and wages grew 3.2% annually, still above pre-pandemic norms. The real test is July CPI due Wednesday. If inflation stays hot, the 'no hike' narrative collapses. If it cools, the Fed stays put. Watch that print, not the headlines today.
Sources (2): livemint.com, livemint.com (2)
This story was synthesised by AI from the 2 sources linked above.
