Tonight's US unemployment rate and non-farm payrolls data for July are simply a big deal! Originally, everyone thought that the job market was just a little bit cold, but it turned out to be worse.
As soon as the data came out, everyone saw that the unemployment rate in July rose from 4.1% in the previous month to 4.3%, and the number of non-farm payrolls also dropped significantly, which was far worse than expected. This means that the employment situation in the United States is accelerating, and everyone is beginning to worry about whether the economy will have a hard landing or even a recession after the interest rate cut in September.
This data is bad for the US economy and the US dollar, but it is good for safe-haven assets such as gold. As soon as the data came out, the US dollar index immediately fell below 104, and the price of gold rose sharply, reaching $2,472 per ounce. The US stock market also fell before the market opened.
This data also affected the expectation of a rate cut in September. Now, the possibility of a 25 basis point rate cut is small, and the possibility of a 50 basis point rate cut is high.
In general, although this data greatly increases the possibility of a rate cut in September, the job market is so bad. If the data in August remains the same and inflation rebounds, the risk of a hard landing or even recession after the September rate cut will be high.
The U.S. stock market is now greatly affected by this data. It is estimated that it will fall at the opening, and the crypto market may also be dragged down. This data may directly turn the rise brought by the expectation of a rate cut into an expectation of an economic recession after the rate cut.
Now it depends on what Powell said before. He said that he would intervene if the unemployment rate worsens, but no one knows whether this intervention can prevent a hard landing and recession.
I have been repeating that the current market is mainly based on waves. I wonder how everyone's earnings are?
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