Ipek Ozkardeskaya
Swissquote Bank Ltd
Risk appetite got another hit yesterday after the US ADP report printed a weaker-than-expected number and revived the worries that the US official jobs data could also disappoint for the second month in a row.
Many investors believe that today’s job figures could be pivotal in determining whether the Fed will cut rates by 25 or 50 basis points at its meeting later this month. Why this data is so important? Above all, it is because the Fed Chair Jerome Powell said that a further weakness in the jobs market is undesired. That’s obviously a good reason for investors to put a lot of weight on the jobs data.
But from a theoretical perspective, this month’s jobs data is especially significant as in July, the Sahm’s Rule was triggered, and the JOLTS report showed the vacancy rate fell below the key 4.6% threshold, which could push unemployment to 4.5%, according to Fed’s Waller’s research paper. So investors are holding their breath and bracing for a potentially higher stress and volatility before the weekly closing bell.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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