Non-farm payrolls broadly bullish

The US jobs data was, overall, bullish and dealers are still divided over as to when interest rates will increase.

US flags
Source: Bloomberg

In July the US added 215,000 jobs on the payrolls, but traders were anticipating 225,000, and the June report was revised higher to 231,000 from 223,000. The unemployment rate held steady at 5.3%, and that was in line with dealer’s expectations. The one stat that may make the Fed have a second think about a September rate rise is the wage growth number which came in at 2.1% on a year-on-year basis, and analyst were hoping to see 2.3%. A declining unemployment rate is all well and good, but central bankers will want to see healthy earnings growth before to move on the base rate.

As the US edges towards full-employment this has spurred on sentiment that a rate hike may be coming sooner than anticipated, and that has been reflected in the financial markets. Gold has been the biggest casualty and dropped to a three-day low on the back of the release. The dollar has gained ground against the euro and pound, and equity markets initially trade lower after the announcement, but have started to reverse their losses. 

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