Job numbers don't cut it

Nick Mastrandrea Market Tea Leaves

USD: Sep '26 is Up at 99.585.

Energies: Sep '26 Crude is Up at 79.39.

Financials: The Sep '26 30 Year T-Bond is Higher by 1 tick and trading at 109.13.

Indices: The Jun '26 S&P 500 emini ES contract is 25 ticks Higher and trading at 7786.00.

Gold: The Aug'26 Gold contract is trading Down at 4397.20.

Initial conclusion

This is not a correlated market. The USD is Up and Crude is Up which is not normal, and the 30-Year T-Bond is trading Higher. The Financials should always correlate with the US dollar such that if the dollar is Higher, then the bonds should follow and vice-versa. The S&P is Higher and Crude is trading Lower which is correlated. Gold is trading Lower which is correlated with the US dollar trading Up. I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one goes Up the other goes Down. Asia traded Mixed. All of Europe is trading Higher.

Possible challenges to traders

Cleveland Fed Inflation Expectations is Tentative. Major.
Lack of major economic news.

We've elected to switch gears a bit and show correlation between the 2-year Treasury notes (ZT) and the S&P futures contract. The YM contract is the Dow Jones Industrial Average, and the purpose is to show reverse correlation between the two instruments. Remember it's likened to a seesaw, when up goes up the other should go down and vice versa.

On Friday the ZT dived Lower at around 8:30 AM EST after the job numbers were released. The Dow climbed Higher at around the same time. Look at the charts below and you'll see a pattern for both assets. The ZT dived Lower at around 8:30 AM EST and the Dow climbed Higher around the same time. These charts represent the newest version of Bar Charts, and I've changed the timeframe to a 15-minute chart to display better. This represented a Short opportunity on the 2-year note, as a trader you could have netted about 20 plus ticks per contract on this trade. Each tick is worth $6.25. Please note: the front month for the ZT is now Sep '26. I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of barcharts

Bias

On Friday we gave the markets a Neutral or Mixed bias as it was Jobs Friday but the US economy lost 23,000 jobs last month yet the markets show a gain on Friday. How is that? I suspect the reason is because everyone anticipates a Fed rate cut in the near future. It is certainly needed in this environment. Today our bias is Neutral or Mixed.

Could this change? Of Course. Remember anything can happen in a volatile market.

Commentary

On Friday, the Dow posted a gain of 152 points, and the other indices showed a gain as well.

Author

Nick Mastrandrea

Market Tea Leaves

Nick Mastrandrea over 20 years experience in trading and formerly held a NASD Series 7. He currently holds a NJ Life, Health and Variable Authority. Nick is a published writer and his work has appeared in Futures Magazine, TraderPlanet and others.

GBP/USD treads water around 1.3500 as Hormuz risks support USD

After closing the previous week in positive territory, GBP/USD trades with caution around 1.3500 on Monday. The pair faces headwinds from a modest US Dollar rebound as mood sours on persistent uncertainty surrounding the reopening of the Strait of Hormuz and US-Iran talks.

EUR/USD steady near 1.1550 as USD selloff pauses

EUR/USD keeps its range near 1.1550 in the second half of the day on Monday, holding the retreat from fresh highs since June 17, touched in reaction to the disappointing US jobs data on Friday. Renewed Middle East tensions lend support to the safe-haven US Dollar, capping the pair's upside attempts despite improved Eurozone sentiment data.

Gold holds firm as Fed rate outlook, Middle East developments remain in focus

Gold (XAU/USD) holds firm on Monday as buyers take a breather following last week’s sharp rally, with the broader market theme still centred on the Federal Reserve’s (Fed) interest-rate outlook and developments in the Middle East. At the time of writing, XAU/USD trades around $4,333, little changed on the day.

Pi Network: Mild bearish bias caps PI corrective rebound

Pi Network extends losses Monday after a bearish close the previous day, as price remains capped below the $0.1000 psychological threshold. Speculative demand for PI is low, with Open Interest holding above $9 million as broader market sentiment improves. The technical outlook for PI indicates a mild bearish bias as the $0.0961 resistance level remains intact.

US Payrolls miss – RBA on deck tomorrow

It would be remiss of me not to kick off this morning’s report with a rundown of last Friday’s US jobs report, which was a belter. Headline payrolls fell by 23,000, versus expectations of an 80,000 gain. The BLS noted that May was revised down by 66,000 (from 129,000) and June by 37,000 (from 57,000), resulting in combined May-June revisions of 103,000 lower than previous reports.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.