USD: US Dollar Surges After Impressive NFP Performance
The US NFP Data for the month of May came at 272K robust number against 185K is printed in the April month. Average Hourly earnings yearly rate at 4.1% from 3.9%, Monthly Basis came at 0.40% versus 0.20% printed in the last month. Unemployement rate rose to 4.0% in the May month from 3.9% in the Past month. US Dollar moved higher against counter pairs after the Robust job numbers
USDCHF is moving in Descending channel and market has rebounded from the lower low area of the channel
The US Dollar (USD) surged following an unexpected boost in the Nonfarm Payrolls figure, which surpassed expectations at 272,000, exceeding even the highest economist estimate of 258,000. The recent speculation surrounding a potential rate cut from the US Federal Reserve in September had been gaining traction in the past few days. However, with these robust numbers, the likelihood of such a move appears to be diminishing. The focus now shifts to whether there will be any rate cuts at all in 2024, as the current data does not necessitate or justify such action from the Fed.
On the economic front, with all data now released, markets can begin to digest the numbers. Federal Reserve Governor Lisa Cook is scheduled to deliver a speech at the Girls Global Academy 2024 Commencement Ceremony at the University of the District of Columbia in Washington, D.C. While there is no anticipation of any policy guidance in her speech.
Key Points from the Daily Digest Market Movers:
Nonfarm Payrolls surged from 185,000 in April to 272,000 in May, with the previous figure of 185,000 revised downward to 165,000, magnifying the impact of the current number.
Monthly Average Hourly Earnings increased to 0.4% in May from 0.2% in the previous month.
Yearly Average Hourly Earnings jumped from 3.9% to 4.1%.
The Unemployment Rate edged up slightly from 3.9% to 4%.
European equities suffered significant losses in response to the US Jobs Report release, while US equities remained indecisive.
The CME Fedwatch Tool is now retracting expectations for a full rate cut in September following the Nonfarm Payrolls print.
The benchmark 10-year US Treasury Note saw a substantial increase in trading, reaching around 4.41%, dashing hopes for an imminent rate cut from the Fed.
USD: “Surprise in the Market: Strong US Jobs Report Dims September Fed Rate Cut Prospects; GameStop, Lyft, and NVIDIA in Focus”
The latest US Nonfarm Payrolls (NFP) data for May surpassed expectations, with a robust increase of 272,000 jobs compared to the 185,000 reported in April. Additionally, there was a notable acceleration in average hourly earnings, with the yearly rate rising to 4.1% from the previous 3.9%. On a monthly basis, average hourly earnings increased by 0.40%, up from 0.20% in the previous month.
However, the unemployment rate saw a slight uptick, rising to 4.0% in May from 3.9% in the previous month. Despite this, the US Dollar gained strength against its counterparts in response to the strong job numbers, reflecting market confidence in the robustness of the US labor market.
The release of stronger-than-expected Non-Farm Payrolls data dashed hopes of a September rate cut by the Fed. Alongside this, GameStop announced its share sale and results in anticipation of the return of the “Roaring Kitty” live stream.
GBPUSD is moving in Ascending channel and market has reached higher low area of the channel
In a detailed analysis by Financial Analyst, Presenter, and Content Editor Angeline Ong, it was highlighted that the unexpected robust U.S. Non-Farm Payroll (NFP) figures for May, reaching 272,000 compared to the anticipated 185,000, significantly impacted financial markets. The higher-than-expected wage growth of 4.1% year-on-year further indicated sustained labor market strength. Consequently, there was increased volatility observed, particularly in stock indices like the Dow Jones, and the US dollar experienced a strengthening trend. Market analysts were taken by surprise, prompting adjustments in their short-term forecasts for Fed actions.
USD: Reactions: “Eye-Popping” May US Payrolls Jump Could Deter Fed from Easing
In May, the US Nonfarm Payrolls (NFP) data exceeded expectations, revealing a robust increase of 272,000 jobs compared to April’s 185,000. Concurrently, average hourly earnings experienced a notable uptick, with the yearly rate climbing to 4.1% from the prior 3.9%, while on a monthly basis, it rose to 0.40% from 0.20% previously. Despite a marginal increase in the unemployment rate to 4.0% from April’s 3.9%, the US Dollar strengthened against its currency counterparts, reflecting market confidence in the resilience of the US labor market.
The U.S. labor market displayed remarkable strength in May, surpassing expectations with a substantial increase in job creation and a rebound in annual wage growth. This robust performance reduces the likelihood of the Federal Reserve initiating rate cuts in September.
Despite a slight uptick in the unemployment rate to 4.0% from April’s 3.9%, a symbolic shift after 27 months of stability, the unexpectedly strong employment report underscores the resilience of the labor market. This reinforces the Fed’s stance of maintaining borrowing costs without immediate adjustments.
Following the release of the report, financial markets revised down the probability of a September rate cut from approximately 70% to about 55%, reflecting the surprising strength of the headline payrolls number. Brian Jacobsen, chief economist at Annex Wealth Management, noted that this data suggests the Fed can prioritize inflation concerns without compromising on growth.
Nonfarm payrolls surged by 272,000 jobs in May, surpassing economists’ expectations of 185,000, with revisions showing fewer job creations in March and April than previously reported. Healthcare, government, and leisure and hospitality sectors led employment gains, indicating a broad-based recovery across industries.
While professional and business services, social assistance, and retail also experienced modest hiring, some sectors, like department stores and home furnishings retailers, saw minor job losses.
The Fed is anticipated to maintain its benchmark interest rate unchanged at its upcoming meeting, given the current range of 5.25% to 5.50%, consistent since July last year. Average hourly earnings increased by 0.4% in May, contributing to a 4.1% annual rise, aligning with the Fed’s inflation target.
AUDUSD is moving in box pattern and market has reached support area of the pattern
However, despite strong job gains and wage growth, concerns linger regarding the sluggish overall economic output in the first quarter and weaker-than-expected data in the current quarter, apart from employment growth and inflation. This mixed signal, compounded by the divergence between robust job creation and the rise in the unemployment rate, complicates investors’ and central bankers’ assessment of the economy’s true trajectory.
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