The US non-farm data in September exceeded expectations by a wide margin, with new employment far exceeding expectations, unemployment falling, and wage growth accelerating. This non-farm data was not only excellent, but also revised the previous data, reversing doubts about its quality. The US economy does not seem to have a "soft landing", but continues to perform strongly.
After the data was released, the market responded quickly, with US bond yields rising, the US dollar index rising, US stocks closing higher, and the Dow Jones reaching a new high. This shows that the strong employment data has a significant impact on the global capital market. Expectations for a 50 basis point rate cut by the Federal Reserve in November have cooled, but 25 basis points have almost become a consensus. If the Federal Reserve slows down the pace of rate cuts, liquidity in emerging markets may be hit.
At the same time, Chinese assets have performed well, attracting a large amount of overseas funds. Chinese stocks and related ETFs have risen rapidly, showing investors' confidence in the Chinese market. Analysts believe that future incremental funds may come from the loosening of Chinese residents' deposits and yen carry trades.
The strong non-farm data has added uncertainty to the global capital market. Wall Street's attitude towards emerging markets has begun to turn cautious. The new Japanese prime minister has released dovish signals, and Buffett plans to issue yen bonds, which may mean that global capital allocation will undergo new changes.
