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. 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.