Payroll rally fizzles out on economy worries
|A brief post-payrolls rally has been entirely reversed as traders fret about a weakening US economy, says Chris Beauchamp, Chief Market Analyst at investing and trading platform IG.
‘Sell the rally’ dominates after weak payrolls
An initially positive reaction to today’s weak payrolls report has given way to some classic ‘buy the rumour, sell the fact’ action in Friday’s afternoon trading. Traders are battling a mix of relief that today’s report confirms a September rate cut while being worried that weak period of job growth spells stagflation ahead.
September volatility starts here?
There is still plenty of scope for September’s traditional volatility to kick off, even with a Fed rate cut looming. Investors should remember that there are two types of rate cut – last September’s was the good kind, taking place in a strengthening economy. Today’s market action suggests the next cut could be the other kind, designed to help support an economy that is already on a recessionary trajectory.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.