The US non-farm payrolls report is out, and it looks strong, but there is hidden information. The increase of 206,000 people did exceed expectations, and you might think this number is strong, but there is other more important information.
First, the unemployment rate rose to 4.1%. The Fed's expectation for the unemployment rate at the end of the year was 4.1%, which has now been achieved. The average hourly wage is in line with expectations. But the real hidden information is that the data for April and May were revised down by 50,000 respectively, with a total of more than 100,000 jobs being revised down. This is exactly the information that caught the market's attention, so we saw the dollar fall, while U.S. Treasury yields fell, and expectations of a rate cut in September rose, which supported the recent gains in crude oil and other industrial commodities, as well as the gains in metals such as gold and silver and the rebound in the crypto market, which will continue to be supported in the short term.
There are two things to watch out for over the weekend. Sunday is the second round of French parliamentary elections, and while the market does not expect the far right to win a majority, if something unexpected happens, the consequences will be dire. The Chinese central bank will also release its foreign exchange reserves data on Sunday, and we will learn about their gold purchases. Remember last month's data release had a huge impact on gold, so it's worth keeping a close eye on.
Finally, I would like to share the performance of our short positions since May 23. We have led our internal partners to successfully take advantage of this entire wave of market conditions. Of course, this also means that we have avoided all the waterfalls.
If you want to know how we do the banding, we do the banding based on the signals given by the internal model, as shown in the figure below.
The internal partners also received six-digit income and a thousand-fold return rate.
Have a great weekend everyone and see you next week.
